master’s thesis entrepreneurship and innovation
TRANSCRIPT
1
Master’s Thesis Entrepreneurship and
Innovation
Developing Entrepreneurial Ecosystems
How, if at all, SpeedUP! Europe programme contributes to creating a
Dutch Entrepreneurial Ecosystem? The case of The Netherlands
Name: Kimberli Habon
Student number: 10827935
Study: Master's in Business Administration
Specialization: Entrepreneurship and Innovation
Institution: University of Amsterdam
Supervisor: dhr. dr. G.T. (Tsvi) Vinig
31/08/2015
2
Statement of Originality
This document is written by Student Kimberli Habon who declares to take full responsibility
for the contents of this document.
I declare that the text and the work presented in this document is original and that no sources
other than those mentioned in the text and its references have been used in creating it.
The Faculty of Economics and Business is responsible solely for the supervision of
completion of the work, not for the contents.
3
Acknowledgements
I would like to express my gratitude to my supervisor Dr. Tsvi Vinig for the useful comments,
remarks and engagement through the learning process of this master thesis. He helped me by
guiding through the whole thesis, and helped me reach the appropriate people. Furthermore, I
would like to thank Ronald Kleverlaan for giving access to the contacts and introducing me to
the interviewees, as well for the all support on the way.
Also, I wish to thank all the participants in my qualitative research, who have willingly shared
their precious time during the process of interviewing. As an international student living
abroad, I experienced difficult times, especially at the beginning of the thesis. I was not sure
whether I could find enough participants for my interviews, but due to all the help, and
support I received I was able to realize it.
Finally, I would like to thank my family and closest friends, who have supported me
throughout entire process, both by keeping me harmonious and helping me put the pieces
together. Without their financial and emotional support, I would not have been able to start
and finish my master abroad.
4
Abstract
The term Entrepreneurial Ecosystem - which has gained a lot of attention, recently - is
relatively new in academic literature. The term refers to an interdependent set of actors that is
governed in such a way that it enables entrepreneurial action. Due to its novelty, the number
of studies related to this topic is limited, however continuously expanding. The purpose of
this thesis is to identify the key interdependent pillars of entrepreneurship ecosystems, define
how these pillars can be observed in The Netherlands, and analyze whether SpeedUP!
Europe, a ground-breaking and disruptive acceleration and support programme of the
European Union can contribute to the development of entrepreneurial ecosystems in The
Netherlands. After identifying the key factors that emerged during the programme, it was
possible to answer whether such initiatives are necessary, whether they can create value and
stimulate productive entrepreneurship, or the holistic approach to such ecosystems is already
working smoothly. It was interesting to see how elements such as cultural support, accessible
markets, regulatory frameworks, support mechanisms, education, universities and the access
to capital could be observed through different viewpoints and understand how each can either
add value, or raise barriers to entrepreneurship in The Netherlands.
Keywords: Entrepreneurship, The Netherlands, Entrepreneurial ecosystem, Startup,
Accelerator, European Union, SpeedUP! Europe, Innovation
Table of Contents
1. Introduction ............................................................................................................................ 7
1.1 Research question and objectives .................................................................................... 8
2. Literature review .................................................................................................................... 9
2.1. Entrepreneurial Ecosystem – theoretical background ..................................................... 9
2.2 Recent theories of entrepreneurial ecosystem ................................................................ 11
2.3 The eight key pillars of the entrepreneurial ecosystem ................................................. 13
2.4. Accessible markets ........................................................................................................ 14
2.5. Government and Regulatory Framework ...................................................................... 15
2.6. Support systems ............................................................................................................ 17
2.7. Starting a business in the lean start-up era .................................................................... 20
2.8. Entrepreneurship in The Netherlands ........................................................................... 22
2.8.1. Macroeconomic performance indicators ................................................................ 22
2.8.2. The Dutch Entrepreneurship Paradox .................................................................... 23
2.8.3. The Entrepreneurial Ecosystem in The Netherlands .............................................. 24
2.8.4. Startup Ecosystems in Amsterdam ........................................................................ 26
2.9. The SpeedUP! Europe Programme ............................................................................... 28
3. Methodology ........................................................................................................................ 31
3.1. Semi-structured interviews ........................................................................................... 32
3.2. Secondary data .............................................................................................................. 34
4. Research findings ................................................................................................................. 35
4.1 Introducing the teams ..................................................................................................... 35
4.2. Accessible market(s): .................................................................................................... 37
4.3. Culture in The Netherlands ........................................................................................... 38
6
4.4. Regulatory framework .................................................................................................. 40
4.4.1. Bureaucracy and Administration ........................................................................... 40
4.4.2. Milestones .............................................................................................................. 41
4.4.3. The Hamburg Hub ................................................................................................. 42
4.5. Support mechanisms ..................................................................................................... 44
4.5.1. The Amsterdam Hub .............................................................................................. 44
4.5.2. FIWARE accelerator .............................................................................................. 46
4.5.3. Network of entrepreneurial peers ........................................................................... 47
4.5.4. Grant from the European Union ............................................................................ 49
4.5.5. Coaches and mentors ............................................................................................. 51
4.6. Entrepreneur-specific trainings and education .............................................................. 52
4.7. Universities as catalysts ................................................................................................ 52
4.8. Providing access to capital ............................................................................................ 53
5. Discussion ............................................................................................................................ 55
6. Conclusion ........................................................................................................................... 61
7. References ............................................................................................................................ 63
8. Appendix .............................................................................................................................. 67
7
1. Introduction
The concept of entrepreneurial ecosystems is relatively new both among academics
and policy makers (OECD report, 2013), but the amount of academic papers, journal articles
and researches that deal with the topic is rapidly growing. The concept should be approached
in a holistic way, which places the entrepreneur in the center.
It is important to highlight that entrepreneurs are not the only key actors of
Entrepreneurial Ecosystems; however they are the ones who lead them. The term refers to an
interdependent and interconnected set of actors next to potential and existing entrepreneurs –
such as organizations, institutions and processes that is governed in such a way that it enables
entrepreneurial action (Stam, 2014).
Entrepreneurial employee activity performs relatively well in The Netherlands
(Global Entrepreneurship Monitor, 2014), but this form of entrepreneurship does not
necessarily take place in start-ups or in high growth firms, since employees in established
corporations can pursue entrepreneurial opportunities as well. The Netherlands is an ideal
location for startups due to its strategic geographical location; it has an international business
and competitive fiscal climate, which is extremely open for innovation and creativity, not to
mention the multilingual workforce and the penetration of the English language (Startup
Delta, 2015).
A profound description of the theory of Entrepreneurial Ecosystems will be
followed by a thorough explanation of the ecosystem in The Netherlands, which provides a
basis for testing the elements of the ecosystem under scrutiny with the involvement of
different stakeholders participating in the SpeedUP! Europe programme.
8
1.1 Research question and objectives
This Master’s Thesis concentrates on the topic of Entrepreneurial Ecosystem in The
Netherlands, with a focus on the SpeedUP! Europe programme, supported by the
European Union. The relevant articles give an introduction to, and consequently a better
understanding of the subject.
The goal is to investigate how, if at all, SpeedUP! Europe programme contributes to
the acceleration of productive entrepreneurship and innovation in the country, and
whether it adds value to the pillars of the ecosystem. With regard to all these the main
question the current research seeks to answer is the following:
Does SpeedUP! Europe programme contribute to creating a Dutch Entrepreneurial
Ecosystem, or does it destroy an already developed, smoothly operating mechanism?
The objective of the research is to find a correlation between the elements of the
entrepreneurial ecosystem and the SpeedUP! Europe programme, and identify – if possible
– each pillar to see whether they have an effect on such ecosystems or not. The question is
whether the project in question coordinated by the European Union – in which The
Netherlands is deeply involved – can create a positive effect on the growth of
entrepreneurial activity, and contribute to the creation of successful and sustainable startup
ecosystems.
9
2. Literature review
To give a deeper insight into the topic, it is important to use literature that deals with
the importance of entrepreneurial ecosystems, discussing its key pillars, and their relevance
among entrepreneurs. Furthermore, the literature gives an insight into the ecosystem in
The Netherlands, and provides background information about the SpeedUP! Europe
programme.
2.1. Entrepreneurial Ecosystem – theoretical background
There is a wide range of literature dealing with the concept of stimulating
entrepreneurship, linking it to economic growth. Development is strongly related to
entrepreneurship, where the government, the private and the non-profit sectors have a
significant role in creating a fertile environment for new venture creation. In the review of
literature I include different approaches to entrepreneurial ecosystems, each with their own
framework.
Firstly, the term “entrepreneurial ecosystem” needs to be defined. It is clear that there
is an ecosystem around the entrepreneur that facilitates entrepreneurship, and a holistic
approach is needed to understand the concept. In their article Suresh and Jaman (2012),
clearly define the existence of external factors that play a significant role. Before defining
the concept of the “entrepreneurial ecosystem” let us divide the phrase into two words. Each
needs to be defined separately before we can start interpreting the correlation between them.
Entrepreneurship is a process by which opportunities to create novel goods and services
are discovered, evaluated and exploited. The second component, the ‘ecosystem’ can be
defined as a biological community of interacting organisms and their physical
10
environment. Here obviously we look at the ‘ecosystem’ in a figurative sense, and
putting the two words together will emphasize that entrepreneurial activity takes place in a
community of interdependent actors that is governed in a way that it enables entrepreneurial
action (Stam, 2014).
Early researches focusing on the topic of ecosystem concentrated mainly on
personality traits (intelligence, lifestyle, talent) and characteristics of the entrepreneur,
believing that the psychological factors can be the main motivating factors of creating an
ecosystem (Suresh - Ramraj, 2012). However, the success of a venture just partly relies on
the personal attributes of the entrepreneur, while external factors - which are beyond the
control of individuals - are more likely to be responsible for success. The authors state that
entrepreneurial ecosystems can generate wealth, if the individuals, the enterprise and the
society are integrated.
Valdez (1988) formed an ecosystem framework where – although he mentions
external factors as well - he still assigns a great importance to personality. He made effort to
understand the economic environmental factors that influence the decision to launch a new
business, by analyzing the relationship between the entrepreneur and the environment. He
focuses on three main elements, the entrepreneur himself and his complex personality, the
immediate environment including capital, land, facilities etc., and the current market
circumstances taking macro and micro conditions into consideration. The core finding of the
article is that a would-be entrepreneur is likely to be more entrepreneurial, and the market
situation is more favourable, if a region is equipped with entrepreneurship-friendly features.
The “entrepreneurial infrastructure” defined by Van De Ven (2002) facilitates
and constraints entrepreneurship. This infrastructure includes “institutional arrangements to
legitimate, regulate, and standardize a new technology; public resource endowments of basic
scientific knowledge, financing mechanism, a pool of competent labour, as well as
11
proprietary R&D, manufacturing, marketing, and distribution functions by private
entrepreneurial firms to commercialize the innovation for profit” (Van De Ven, 2002, pp.
211).
Neck et al. (2004) identified two key components that are considered to be the
“heart” of entrepreneurial ecosystem (see Figure 1.). The first is the incubators’ role in
the spin-off and start-up activities. They can have an either implicit or explicit role for a
new company. The second refers to the region itself, the factors that influence start-up
activities, such as the formal and informal networks, physical infrastructure and culture. The
formal network consists of the universities, government-given subsidies, incentives;
professional and support services like tax and legal consultants, capital services such as
business angels or venture capital firms, a high-tech talent pool consisting qualified
employees, and large established companies. According to the research in the article
(67% of the respondents identified as being significant) informal networks are important
parts of the ecosystem insomuch as they add some form of value in a way, and facilitate
the evolution of the ecosystem, and start-ups. S u c h a network includes friends,
family members, colleagues, and other types of informal relations, where trust plays a big
role. The physical infrastructure such roads, office space, real estate etc., is defined as the
tangible element of the country’s infrastructure. Finally, the role of culture is considered
to be important because it makes the organization unique, is important to develop, and
difficult to replicate.
2.2 Recent theories of entrepreneurial ecosystem
Recent articles dealing with entrepreneurial ecosystem are associated to Isenberg
(2010, 2011, 2014). According to him, the main characteristics that distinguish this
12
new ecosystem approach from earlier ones mentioned before, is the spatial proximity of
resources, uniqueness, sustainability, and comprehensiveness (Isenberg, 2010,2011). In his
articles, he grouped the ecosystem into six main domains, as shown in Figure 2. These
domains are facilitating policies from the government and leadership, including public
universities and research institutes that have an important role in creating knowledge, the
regulatory bodies that are responsible for the implementation of incentives, such as tax
benefits and the removal of bureaucratic barriers in order to foster business development.
The second domain is the access to financial capital, which are private institutions in
charge of entrepreneurship funding, namely venture capital funds, angel investors, seed
capital etc.
A supportive culture is an important element that consists of all societal
characteristics of a community and perceived through success stories and societal norms.
For instance, the fear of failure among people is a common limiting factor against
entrepreneurship. Institutional and infrastructural support has a key role in creating an
ecosystem and non-governmental institutions are important entrepreneurship stimulators as
well. These can be hubs, accelerators and incubators, and also support professions like
accounting and law firms that provide help to the establishment of new ventures. A
relevant human capital that includes professionals, the mass work force, and the
educational institutions is equally essential. The last domain is the market, which consists
of networks (entrepreneurs' network, diaspora network etc.) and early customers. “It is
important to have an existing consumer mass ready to purchase new products and
disseminate them via domestic and international contact network” (La Rovere, Ozório, de
Jesus Melo, 2015). It is important to mention that the ecosystem is only complete, and
development will only occur, if these different elements are handled altogether.
In his article Isenberg (2014) described several misconceptions about entrepreneurial
13
ecosystem that can be a barrier of the emergence. The principal findings of the article state
that the biggest challenges of growth are (1) access to talent, (2) excessive bureaucracy, and
(3) scarce early stage capital. It highlights the indirect importance of banks, of large
corporations, and the fact that entrepreneurs are not only actors that drive the ecosystem, but
a network of many different stakeholders as well. The strength of an entrepreneurial
ecosystem is not necessary attributed to either an increased number of start-ups or to the
creation of co-working spaces. All in all, he believes that the creation of a strong
entrepreneurial ecosystem is based on a holistic approach and all factors should be integrated
into a system in order to create a fertile ground for entrepreneurship.
2.3 The eight key pillars of the entrepreneurial ecosystem
The Report Summary of The World Economic Forum, written in collaboration with
Stanford University, E&Y and Endeavor (2013) identified eight key pillars that
contribute to an entrepreneurial ecosystem. There is a huge overlap between Isenberg’s
findings and the results concluded in the report (Figure 3). The article provides a
better insight into the opinion of entrepreneurs, by making a survey where they were
asked to prioritize the eight key pillars, in order to find out, which is considered to be most
important for them, in relation to the growth of business. Interestingly, accessible markets,
human capital/workforce and funding and financing were the three pillars of the
ecosystem that scored the highest. High score means that these factors are considered as
being the most important for the growth of early- stage companies.
The survey took place globally, starting from Silicon Valley in the U.S. to Europe,
and all over Asia. In this case, the findings about Europe are considered as relevant, since
all selected teams of the Speed UP! Europe programme are European, and the research of the
14
thesis is based on their responses as well. The table showing the result of the Heat Map of the
“Most Important Pillars for the Growth/Success of the Company Entrepreneurial Ecosystems
by Continent/Region” is quite homogeneous, especially when Europe is compared with
Silicon Valley.
It is clear that a successful entrepreneurial ecosystem should be entrepreneur
driven, should have a long-term focus, and should be inclusive to anyone who wants to
participate. This includes all possibilities, where would-be entrepreneurs have a chance to
effectuate their dreams, and other stakeholders of the ecosystem who contribute to
realizing it. There are several chances like meetings, workshops, festivals, and events that
create opportunities for the actors to meet with each other, and keep the ecosystem running.
2.4. Accessible markets
The availability of accessible markets is crucial for startups, and companies at an early
stage. The pillar includes the number and category of the potential customers, and whether
they are foreign or local ones, so can be found on the domestic market. For a new product it is
extremely important to find new customers that can be the “ecosystem feeders” who are
responsible for stimulating entrepreneurship. Investors, service providers, associations,
public organizations, large companies, Small/ Medium- sized enterprises, or the Government
can serve as a customer as well.
Companies take an important role, especially as leverage for early-stage companies
in their growth and development. First of all, large companies create jobs and give
employment to a numerous workforce. They are scalable, can easily attract venture capital,
and have a broad geographical reach (Pretet, 2013). But how can start-ups, and early-stage
companies’ benefit from creating a productive relationship with large companies?
Working with large companies helps gaining attention, because being early customers
15
of the products creates customer engagement. They can generate huge revenues and
credibility by being early adopters. Building credibility is extremely important, when the
start-up is seeking for new customers, such as SMEs or governments. Large companies can
also incorporate the start-up’s product in their own portfolio, which will broaden the
customer reach of the start-up on the one hand, and by displaying their brand and references
it can also add value. Large ventures can be strategic investors and/or financing partners by
providing value added services and can take a role as mentors and advisors, in order to give
an insight into new markets. They can help them bring their products to markets as
distributors, resellers or logistics partners, and can enhance operating capability by giving
access to assets that would have been too expensive. These include access to manufacturing,
software, technology and know-how. Finally licensing in or out to large companies help
startups to access and use technologies already developed, and to access large scale testing,
manufacturing or distribution. (Drexler, 2014).
2.5. Government and Regulatory Framework
One of the most important components of entrepreneurial ecosystems is government
policy, and the concept of entrepreneurial ecosystems has received increasing attention
from policy makers. Regulatory policies can have both positive and negative impact on the
growth of new ventures. Government should design policies that empower private actors
rather than public ones, and facilitates the growth of the ecosystem. There are several roles
the government can play in an ecosystem, just like creating entrepreneurship friendly
conditions on a national level, and facilitation network and connections on a local level.
These involve education (international studies), fundamental scientific research, tax
incentives, employment protection legislation, products market legislation, and bankruptcy
regulations as motivating factors for entrepreneurs (Drexler, 2014)
16
The aim of government policies is to create strategies for entrepreneurship that are
“growth oriented”, and have a focus on increasing the total number of firms with business
startup programs, venture capital financing and investments in research and development
and technology transfer. Active involvement is needed from Government Ministers, and the
policies they create should focus on the ecosystem holistically instead of just picking out
elements of it. This means that policies should take into consideration not only business and
entrepreneurship, but also taxation, financial services, telecommunications education etc.. It
is important to build on existing industries, rather than create new ones. Additionally, all
industry sectors should be taken into account, not only just high-tech firms. Policies should
address both the needs of the businesses and their management teams. Finally, a top-down
and bottom-up approach is needed, so both macro and micro level policies are required to
create sustainable growth in the ecosystem (Mazzarol, 2014).
The following table adapted from Mason and Brown (2014) presents the policy
points of focus for entrepreneurial ecosystems; illustrating and summarizes the
recommendations of policies mentioned above:
Figure 4.: The policy points of focus for entrepreneurial ecosystems
17
2.6. Support systems
As it has been mentioned before, business incubators and accelerators - as part of the
ecosystem - play an important role when a company is in its early stage. In the discussion
paper of Miller and Bound (2011) we can get an insight into the rise of accelerator programs.
In the article, they define five main characteristics that distinguish accelerators from business
incubators. The first of these features is the open application process to everybody, which
makes the whole procedure highly competitive. The program focuses on small teams rather
than individuals, and they can receive a pre-seed investment (usually in exchange for
equity), and a time limited support (3-6 months), which includes programmed events and
intensive mentoring. One of the first accelerators was the “Y Combinator “ that created a
new model for funding early stage start-ups. It helped companies like Dropbox or Airbnb to
rise. Their goal is to get start-ups off the ground, figuring out the biggest problems they
face and find a product market-fit.
The rise of accelerator programs is related to economic changes. The costs associated
with early stage start-ups have dropped significantly, and investment can be made with a
small amount of money. These programs are beneficial for angel and venture capital investors
because it creates a “pipeline” of investable companies. Angel investors can get involved and
make better decisions about the companies to invest in at the end of the program. Aernoudt
(2004) deals with the topic of business incubators and the role of business angels. The
information in this article is important because it gives a better understanding of the
significance of the different actors in business that can provide financing and mentoring to
start-ups. The paper highlights the problem of the underdevelopment of seed financing in
Europe that leads to the lack of entrepreneurial activity. The paper concentrates on the
dynamic process of incubation, and the importance of close links between business angel
networks and incubators.
18
Another advantage of acceleration is that ‘batches of companies’ are invested in at
the same time, and this is what distinguishes them from other early-stage investments.
This provides a “peer environment” for the teams, where they can help each other,
exchange ideas, and develop.
Currently the demand for acceleration programs is really high, the environment
since the “dot-com boom” has changed significantly, which is in favour of building tech
start-ups. Investors can improve the performance of their portfolio with this type of
incubation, and big companies often develop in-house incubators to support new companies.
Kim and Wagman deal with the emergence of start-up accelerators in two articles
(2012). They say that there have been significant changes in the early-stage finances of new
ventures. Traditionally start-ups nurtured in business incubators (universities, non-profit
organizations, local government etc.) and the primary source of funding was Venture
Capital (VC). However, new trends are on stage and VC firms are more likely to move to
larger and later stage funding, which has led to the emergence of a new form of
entrepreneurial nurturing and equity financing, known as start-up accelerators. The aim of
these articles is to find out the incentives of the start-up accelerators and reveal the
inconsistencies. They compare them with the traditional incubators and VC firms, revealing
the potential advantages and disadvantages.
On the other hand there are some pitfalls of business incubation that the members
often fail to realize in time. In his article published in Harvard Business Review (2013)
Sramana points out the problems with incubators, and gives some possible solutions. He
states that most of the business incubators around the world fail. Companies “need to
provide real value, not just office space, and they need to measure success in more than
just outside funding”. Real value manifests itself in additional services like business
counselling and management assistance. Valuable business incubators help entrepreneurs
19
create a business with validated market opportunity, where customers are willing to pay for
their product. The other problem is connected with funding, that is often considered to be
the major success metric, however it is equally important to obtain customer validation by
finding a repeatable scalable business model around the product or service, and provide
education.
What is also considered to be important in this topic is to find out the steps the
European Union can take in order to boost entrepreneurship in Europe. The article by
Hoffmann (2011) concentrates on the difficulties the European Union has to face in
connection with entrepreneurship. The main problem is that there is not enough
entrepreneurial activity within the EU, although it is a core element of economic growth, and
the EU must take actions in order to transform its economy and build competitive strength.
There are several policy challenges it must tackle, and actions need to be taken. The
main problem it identifies is that there is more entrepreneurial potential within the EU than
exploited, and it gives examples in comparison with the US, assuming that successful
entrepreneurship is more likely to take place there. The EU fails to encourage enough people
to take risks and start up new businesses. This is shown in the low potential of the expansion
rate of start-ups, the lack of opportunities to test the market, or the inappropriate
entrepreneurial business environment. The article defines the factors affecting
entrepreneurship both on a micro and macroeconomic level, like the opportunities that create
value, the skills, capital, incentives, motivation, and various macroeconomic conditions (e.g.
unemployment rate). The core finding of the paper is the lack of growth of new firms in
Europe. The paper identifies the real policy challenges of the EU with a comparative analysis
of the US, and the areas where reforms are needed, just like in restart possibilities, labour
market regulation, venture capital, exit market or entrepreneurship education.
20
2.7. Starting a business in the lean start-up era
Nowadays starting a business has arrived to a new era. Would-be entrepreneurs
have the chance to realize their business ideas, by taking advantage of today’s new
opportunities. Establishing a business in the digital sector requires a lower amount of seed
investment, than in the past. The idea behind this is that once an entrepreneur (or a team of
entrepreneurs) has identified a niche in the market, has found a potential solution to a
unique need for future customers, and uses it as a basis for his idea he can build it in a short
run with the existing and accessible technologies. He is able to launch a Minimum Viable
Product (MVP), and measure the impact on users, analyze the data, and refine them
by iterations. This is a cycle consisting of three phases (Pretet, 2013).
When the testing is ready, the second step is to team up with start-up accelerators in
order to further develop of the idea (early examples: Y-Combinator, TechStars). Start-ups
receive a pre-seed investment, and human capital injection, and after a specific period of time
they will be ready for new sources of financial capital. It is really difficult to receive funding
because these are considered scarce resources, and the highly competitive environment will
make it even more challenging to obtain financial capital. There are several fund-raising
opportunities such as crowd funding (e.g. KickStarter) or pre-financing platforms, Venture
Capital or Business Angels for early-stage investments. This whole process is called the ‘Lean
Start- Up” (Pretet, 2013).
21
Traditionally, the following steps are taken to establish a business:
1. Write a business plan
2. Pitch it to investors
3. Assemble a team
4. Introduce a product
5. Bring it to market and sell it
One main disadvantage of this “formula” is that the risk of failure is extremely high.
A recent research by Shikhar Gosh – senior lecturer at Harvard Business School – proved
that three out of four venture backed start-ups do not return investor’s capital in the U.S
(Gage, 2012). The lean start-up method is considered to be less risky for several reasons.
First of all, it supports experimentation, customer feedback, and iterative design. This is far
away from what is perceived to be “conventional entrepreneurship”. The lean start-up
incorporates the idea of “failing fast” and “learning continually” by adapting, iterating,
improving and learning from customers, which can significantly improve the success rate of
new venture creation.
Entrepreneurs in the lean start-up need to create a Business Model Canvas (see
Figure 5.), containing nine building blocks, which is a framework where they can
summarize their hypotheses. Next, to test their assumptions, they start collecting data from
potential users, partners or purchasers, in order to receive feedback. It is here that the cycle
starts because after analyzing the data entrepreneurs revise their assumptions and start the
testing all over again until they are satisfied with the results. After this comes the stage of
“agile development” where MVP is tested. Entrepreneurs intending to found a lean start-up
do not begin with a business plan; they begin by finding a business model (Blank, 2013).
22
Today, companies are facing a rapidly changing environment with globalization,
disruptive technologies, and new regulations that they need to react to somehow. By fostering
the creation of new ventures, would-be entrepreneurs are more likely to found companies,
taking advantage of the new opportunities they have. There are no more long technology
development cycles, nor high costs of getting the first customers. There are many chances for
start-ups before seeking venture capital, like accelerator programs, that help them achieve
their goals. With the use of open source software and cloud services, the costs of software
development have become much cheaper (Blank, 2013).
2.8. Entrepreneurship in The Netherlands
2.8.1. Macroeconomic performance indicators
Entrepreneurship is considered to be really important in The Netherlands, one of
the wealthiest countries in the world for centuries, having two “golden ages” in its
history. Due to its productive entrepreneurship, the country became outstanding both in
the 17th century (stock exchange, Bank of Amsterdam) and the late 19th century with the
multinationals like Philips, Shell or Unilever.
Up to 2013, there has been a dramatic increase in several fields of economy in the
country, which contributed and still contributes to the country's prosperity. The earning
capacity and the labour productivity/hour have been rising, and the unemployment rates are
relatively low, compared to other similar countries like Germany, Denmark or Belgium. What
is seen is that the biggest corporations in The Netherlands lack dynamism, and have a decline
in their employment size. This situation has both advantages and disadvantages. It does not
have a positive effect on the national employment rate in general; however, it creates new
opportunities for new firms who are in need of labour. Unfortunately, this employment is not
23
realized in new, high-growth start-ups, but in the rise of solo-self employment. The data
(GEM) speaks for itself; the rate of low-growth oriented independent entrepreneurship is very
high in The Netherlands, however the high-growth oriented solo entrepreneurship is not
outstanding, just as the rate of high-growth firms compared to similar countries. These
statements are also proved by the stagnation of gazelles (young, high-growth firms with at
least 20 employees) after 2002 (KvK, 2009).
In the last decade there has been a rise in independent entrepreneurship in The
Netherlands, also called the “Dutch Entrepreneurship Miracle”. However, this phrase needs
some further explanation. Data gathered from the Global Entrepreneurship monitor proved
that the Total Early-Stage Entrepreneurial Activity - which includes the percent of working
age population who are about to start an entrepreneurial activity, or who have started one
from a maximum of 3 and a half years - has more than doubled within a decade, reaching the
level of 10% in 2012.
2.8.2. The Dutch Entrepreneurship Paradox
Public policies played a significant role in creating this fertile ground for
entrepreneurship. However, the rise of entrepreneurship is not directly proportional with the
level of innovation in the country, and this is considered to be the “Dutch Entrepreneurship
Paradox”. Young, high-growth firms – seen as the generators of productive entrepreneurship
- are the ones who increase innovativeness in the country, and their role in development and
innovation is way more significant, compared to entrepreneurs operating in solo self-
employment. Obviously, self-employment and new venture creation are beneficial for
decreasing unemployment rate in The Netherlands, but it does not have a big influence on
innovation and productivity (Stam, 2014).
24
The rise of entrepreneurship has been stimulated by several government policies and
fiscal facilities, which have made the labour market more flexible and have been in favour
of temporary and part-time labour, and the growth in the number of self-employed. The
original purpose of these policies and regulations was to stimulate entrepreneurship and
innovation at the same time to achieve economic growth.
2.8.3. The Entrepreneurial Ecosystem in The Netherlands
According to all issues mentioned above, t h e question arises: how can
productive entrepreneurship paired with innovation be accelerated in The Netherlands?
There are several propositions. Innovation has to be stimulated by interactions between
sets of expertise at an optimal cognitive distance. Innovation should be stimulated by
independent entrepreneurs in high-growth start-ups, by independent professionals in
collectives of the self-employed, and by enabling entrepreneurial action for significant
value creation by employees, a shift towards people's interaction to create new value.
The policy changes meant to transform the Dutch entrepreneurial ecosystem are
derived from the entrepreneurial ecosystem approach shown in Figure 6 (Stam, 2014),
illustrating the elements, outputs and outcomes.
Figure 6.: Key elements, outputs and outcomes of Entrepreneurial Ecosystem
25
The outputs namely the entrepreneurial activity is a process by which
individuals pursue opportunities for innovation. In order to make innovation happen, there
must be new value creation in the society, which is the outcome of the entrepreneurial
ecosystem. The ecosystem can be decomposed into systemic and framework conditions.
The formal, and informal institutions, and the physical infrastructure can either enable
or constraint human interaction and entrepreneurial action. The culture and the demand for
new value are also part of the framework conditions. The systemic conditions including
networks enable a smooth division of labour and a flow of information and capital;
leadership provides guidance and role models. Accessibility to finance has a crucial
importance for investments in entrepreneurial projects that are uncertain, and have a long-
term pay-off. Talent means a presence of diverse and skilled workforce, which is
considered one of the most important elements of the ecosystem. Entrepreneurial
opportunities can be found in new knowledge, both in public and private organizations. In
order to lower the entry barriers for entrepreneurs, there are several support services
operating in the ecosystem, consisting of all kinds of intermediaries.
Back to policy actions, the four framework conditions can be modified to stimulate
entrepreneurship. The change i n formal institutions enables labour mobility, enhancing
the circulation of talent, the recombination of knowledge as well as promoting cross-
fertilization between areas of expertise. Opening up public demand for entrepreneurs to
provide finance for new knowledge creation and application, stimulating a culture of
entrepreneurship and entrepreneurial leadership by incentivizing educational programs,
provide role models, and communicate good practices. Finally, adapting or creating physical
infrastructure in order to enhance knowledge circulation and networks, with the
development of ‘third places’ between the actors is also important. These can be realized
in ‘meeting places’ where interactions, learning opportunities, and knowledge exchange
26
can take place, not to mention networking and recruiting opportunities. If we look at all
the a b o v e suggestions, w e can conclude that entrepreneurship plays a huge role in The
Netherlands, but there are several areas where changes and improvements are needed to
enhance it in a more effective way. The SpeedUP! Europe programme the European Union
offers can be one step towards achieving these goals, towards creating a more
functional, productive entrepreneurial ecosystem.
2.8.4. Startup Ecosystems in Amsterdam
According to a recent report on the Global Startup Ecosystems (2015), where cities are
ranked by five major components: Performance, Funding, Talent, Market Reach, and Startup
Experience, Amsterdam is definitely developing its ecosystem, and has the potential to
become one of the most attractive locations for tech-startup founders. Of course Silicon
Valley, and other American cities like New York, Los Angeles or Boston are still leading the
list, but Amsterdam is continuously developing and has reached a prominent place by
becoming one of the world’s top 20 startup ecosystems, the 5th hub within Europe and the 3rd
fastest growing ecosystem.
The number of tech-talents is growing rapidly, due to the country’s excellent
educational system, and also because entrepreneurs find Amsterdam an ideal location, a
livable and affordable city, to get their business started.
There are several big companies that have their headquarters in Amsterdam. The city
also abounds in accelerators and incubators such as Startupbootcamp or Rockstart, which
definitely add to the success stories, not to mention the extensive support received from the
government. One good example for government initiatives is the StartupDelta, which is trying
to unite and better allocate startup resources.
27
However, further development is needed, in order to catch up with the best European
cities like London, Berlin or Paris. For instance the biggest challenge for Amsterdam is the
access to capital for startups. There is a lack of seed and growth capital, which holds back the
success of entrepreneurs; there are a lot of inexperienced angel investors, who only invest in
startups that have a positive cash flow. This insufficient flow of capital is especially prevalent
among tech startups, despite the fact that financiers do seek the opportunities to invest in
profitable startups. However, they often find that high-tech startups involve too high risks, it
is therefore difficult to attract funding to finance technological risk -, or they do not see
enough opportunities in them (Atena et. al, 2014).. Bank loan is not too attractive for
entrepreneurs, because banks only lend money to those who can prove that they have stable
cash flow, and with startups it is really difficult, especially at an early stage. VC funds could
be extremely valuable for startups, however entrepreneurs need to give up a certain amount of
equity, and dealing with investors is considered to be really time consuming. Subsidies and
grants are evaluated quite positively, however the opportunities are limited. Entrepreneurs
prefer this form of financing, because they consider it as “free money”, and the consortia can
get even larger amounts of money, especially in European grants. The drawback of this type
is that it requires a considerable time to acquire it, and it comes along with a lot of
administration hustle.
Many entrepreneurs finance their startups from their own savings, and it is quite
common to receive help from friend and family, because they believe in their ideas; however,
most of the time these sums are not enough, and other alternatives are needed. Crowdfunding
for example is a perfect way of raising money from those who believe in the product.
Tax incentives in The Netherlands allow great deductions. For example there is a great
opportunity to decrease the amount of tax for R&D personnel, but this is more beneficial for
later stage companies, because there is little to retain at the beginning.
28
In terms of market reach, it scores within the top 10, which is really impressive, if we look at
how small the Dutch market is; this success is due to the country’s international orientation
and openness, which is visible in the ratio of the foreign customers they have. The level
English language penetration is extremely high; more than 90% of the Dutch population is
able to have a conversation in English.
2.9. The SpeedUP! Europe Programme
The SpeedUP! Europe is a disruptive, groundbreaking acceleration and support
project co-funded by the European Union. It has received funding from the European
Union’s Seventh Framework Programme, is part of the European Commission’s Future
Internet Public Private Partnership Program FI-PPP and related to the "FIWARE" Future
Internet ecosystem and open source software bricks. According to Olaf-Gerd Gemein – the
coordinator of the programme -, and Stefan Stengel – €6.9 million have been invested into
the startups already in 2015.
SpeedUP! Europe is an innovative accelerator program, providing financial and
non financial-support such as coordination, entrepreneurial training and mentoring for
European start-ups, with the use of the FIWARE technology. Every team who work in,
or are residents of a country that takes part in the Seventh Framework Programme could
apply to the programme. Approved projects are supported by one of the nine European
business support organizations involved in the projects, located in Hamburg (Germany),
Stockholm (Sweden), (Copenhagen) Denmark, and Amsterdam (The Netherlands). The
local partners in Amsterdam are Webclusive, University of Amsterdam (UvA) and
Crowdfundinghub.
29
At the start of the project 100 teams were selected from 13 European Countries
(most of them from Germany), and received a funding of €50,000 to start. Later on during
the project implementation they can apply for additional €20,000, with no repayment, or
share transfer commitment. However, these teams have to meet certain conditions, such as
“earning” credits by attending specific SpeedUP! trainings, workshops etc. This extra money
can be received during the project phase, in order to add a new team member, purchase
additional development equipment or software. On top of these, there is a winning award -
taking place at the end of 2015 - for teams selected from the top 10 proposals. These
finalists have the chance to present their projects at the Entrepreneurship summit in front of a
high-profile jury. Three winning proposals will receive cash prizes, and additional mentoring.
The team finishing in the first place will receive €300,000 (FundingBox, 2014). There are
three milestones in total to be reached, based on the performance of the teams. At this point
teams have reached the second milestone where they had to attend a pitching event where
they were expected to present what they have achieved till then.
According to Olaf-Gerd Gemein, the program-coordinator of SpeedUP! Europe,
approximately 37 coaches and 105 mentors are assigned, and work with the teams daily
providing support and network to the projects. The physical hubs are responsible for
increasing the chance of a team to get funding. At this stage, they have the opportunity to get
in touch with business angels as well. There are training opportunities for the entrepreneurs
on how to deal with and implement the projects, and they can participate in pitch training
sessions as well. Of course, the Intellectual Property Rights are guaranteed.
As it was mentioned before, one of the main criteria for teams to apply for the
program is the use of the FIWARE technology, which is an innovative library, a platform
and a framework developed by 25 leading European IT companies. SpeedUP! Europe is one
of the members of the FIWARE programme, where the goal is to make ventures use and
30
adopt the technologies and assets provided by FIWARE, the core platform of the FI-PPP
platform. The FI-PPP is a 500 million euro programme, including the 300 million euro
contribution from the European Commission for internet-enabled innovation. At this point
another question arises, and can be further investigated, namely why would the European
Union invest such a huge amount of money in this programme, and how does it ensure that
it meets the expectations? FIWARE technology has many advantages, and it creates a
range of possibilities for start-ups to develop. The main benefit is that it accelerates the
adoption of future IT technologies, and improves the business processes through the
Internet. It is cost-effective, public, and royalty free. According to Dr. Tsvi Vinig,
professor of Entrepreneurship at the UvA, the technology enables teams to accelerate their
product development process. “By using FIWARE technology you don’t have to build
everything from scratch. If your product idea requires a GPS positioning system you can
use a ready-made FIWARE module instead of developing a new one yourself” – he
explained (Sameri, 2014)
There are many talented people eager to materialize their skills who can take
advantage of this opportunity. With this system, entrepreneurs, stakeholders, and
technology providers can connect with each other to create a sustainable open innovation
ecosystem. Entrepreneurs should follow their dreams and get out of their comfort zone, if
they want to take advantage of the opportunities and allow themselves to be “investor-
ready”. The program believes that there is a chance for everybody to become an
entrepreneur, believing that “Entrepreneurs are made, rather than born.” (Olaf-Gerd
Gemein, 2014).
31
3. Methodology
I have chosen the qualitative research methodology, to find an answer to my
research question. According to Gephart (2004) qualitative research is highly descriptive,
emphasizes the social construction of reality, and focuses on revealing how extensively
theory operates in particular examples. Qualitative research is an appropriate choice if
the researcher would like to get deeper and more detailed understanding of a phenomenon
or event in the real-life.
I choose a deductive approach in my research. After finding, and sorting out
the relevant information about the factors that create a sustainable entrepreneurial
ecosystem, I began to seek answers to the questions and sub-questions formed o n the
basis of literature, analyzed the results and findings to see whether they support the
theory.
The thesis is a single case study, in which I investigate a contemporary topic of
entrepreneurship, and give an in-depth exploration of the complexity and uniqueness of the
SpeedUP! Europe Project in a “real life” context (Simons, 2009). The study is a
snapshot, because it is an ongoing project revealing new and new information on a daily
basis.
The case study is exploratory; the goal is to discover all the general information about
the topic with the use of primary and secondary data. The latter is collected from relevant
academic articles and journals such as the ’Journal of Business Management’ or
’Harvard Business Review’ and data and information are gathered from surveys and
associated websites like The Global Entrepreneurship Monitor, Entrepreneurial Institutional
Policies or The Delta Entrepreneurship Network.
32
3.1. Semi-structured interviews
I collected non-numerical primary data with semi-structured interviews, asking open-
ended questions. In the entrepreneurial ecosystem, there are different kinds of stakeholders,
therefore in this case, I conducted interviews with the selected team leaders and – if the leader
was not available – with team members of the programme, and also one of their mentors who
is the coordinator of the hub located in Amsterdam. University of Amsterdam is one of the
partners of the programme; therefore I had no difficulty getting access to the contact list of the
teams. First, I contacted them via e-mail or phone call, and then I arranged meetings to make
the interviews either face-to face, or via Skype call. There were 100 selected teams, and at the
beginning 10 out of them were from The Netherlands. Interviewing the teams located in The
Netherlands, and the professionals surrounding them, provided a sufficient basis for an in-
depth analysis of the Dutch entrepreneurial ecosystem.
The goal w a s to find out whether SpeedUP! Europe programme fits into the
recent theory of entrepreneurship ecosystems, and if i t does, how can the individual
factors and pillars become visible in the project. I assumed that the programme contributed
to the growth of productive, innovation driven entrepreneurship in The Netherlands.
During the interviews, I lead the conversation in such a way as to find answers to categories
of questions. The interviews took approximately o n e hour long (between 45-70 minutes),
and they were recorded with the consent of each interviewee, in order to make a
transcript later on, for the more efficient analysis of the data. After making the transcript of
the interviews I used NVivo coding, which accelerated the analysis, and made it more
transparent for defining the categories, and recognizing the elements of an entrepreneurial
ecosystem. After collecting both the primary and secondary data I had no difficulty in
contrasting the two with each other.
33
The interview questions were based on a framework created by prof. dr. Erik Stam,
Professor at Utrecht University School of Economics. In his report on “The Dutch
Entrepreneurial Ecosystem” (2014) he summarized the key elements of the entrepreneurial
ecosystem approach, used as a guideline to the questions (See Appendix).
In order to make a research feasible, well structured, interview questions are
needed. Time-management is also essential, because making and analyzing the interviews
is extremely time consuming. Another possible limitation could have been the insufficient
number of interviews I could make, because I needed to reach a sufficient number of
people in order to make general comparisons and ensure confidentiality at the same time.
The more complex and in-depth information I could get from interviews, the more
difficult it was to compare the results, and analyze them.
The research was based upon 10 interviews. First, the Amsterdam Hub started with 10
teams, but at the first milestone one team dropped out so only 9 teams were left in The
Netherlands, who could be part of the data collection. I managed to reach 8 teams and within
the 8 teams I had interviews with 9 people. On the whole I interviewed 5 team leaders, and 4
team members (2 of them coming from the same team, because one of them was more
informed about the entrepreneurial part of the project, while the other was more familiar
with the technological part) and the coordinator of the hub in Amsterdam. Team leaders
were not always available for interview, because most of the teams came from abroad, and
the leaders were staying in their home country. One team leader refused the interview,
because they were busy with a crowdfunding campaign. I managed to interview the
coordinator of the Amsterdam Hub, who worked also as a coach in the project, and a
professional in crowdfunding. The hubmaster managed to give more objective answers to the
interview questions, comparing to the teams.
34
Luckily, most of the teams were available in their offices located in the centre of
Amsterdam, and thanks to the supportive environment I experienced during the data
collection; I could reach the teams with the help of the coordinator of the Amsterdam Hub.
With the help of the office manager I got to be introduced to the teams, and with her support
I was able to visit the hub, reserve quiet and private meeting rooms, and conduct the
interviews.
3.2. Secondary data
There is a lot of public information published on the official website of the SpeedUP!
Europe (www.speedupeurope.eu) and FIWARE (www.fiware.org), which helped with the
analysis of the data. Social media platforms also provided extra information on the project,
and the different milestones within the project. I gathered data from the official Facebook
page of the programme as well, where the latest news, events, photographs etc. were
published. I also joined the group called “Speed UP! Europe” on LinkedIn where I could
gain access to group conversations about recent updates in the programme.
35
4. Research findings
The interviews were conducted between May and June, therefore all information is
based on that phase of the project. The teams develop their projects continuously, causing
changes to happen from week-to-week since they need to go through certain stages in the
SpeedUP! Europe project. This is the reason why the information and results presented in the
thesis reflect that specific period of the programme.
4.1 Introducing the teams
All teams interviewed were allocated to a specific sector, such as Cleantech,
Smarcities, or Agribusiness. There were altogether 9 teams in the Amsterdam hub; 1 team
leader could not attend the meeting because of their currently running crowdfunding
campaign. In the following table the names of the projects are presented in the same form as
the one found on the official website, and a brief explanation of what their project is about.
Number Team Short description
1. Fruitania A platform that helps food growers export their
products and farmers to explore new markets.
2. ReTreat
A Remote Depression Treat Bracelet for use in
healthcare ideal for treatment of diseases such
as heart problems, diabetes or depression.!
3. SeeBat WebForest
The Application of the SeeBat and WebForest
provides companies with a better insight into
the status of the waste container (full, empty,
partially filled) and can - therefore - plan
effectively and efficiently the transport by
trucks. This will save time, fuel and moreover
36
produce less CO2. Fewer trucks on the roads
means less traffic-jams, which will help the
economy and the environment (rt-bi.nl, 2015).
4. SmartPlace A device that creates Smart and Energy
Efficient Buildings and Places.
5. SODAQ (SRS)
Smart road salting in the Dutch city of Assen.
They already had a successful crowdfunding
campaign for a microcontroller they are using.
6. Speed Up Smart Farming
A device developed for agricultural purposes,
to increase the efficiency of farming. The
device collects data about the fields, soil,
humidity, consumption etc., sends it to the
cloud and using the data gathered, farmers can
increase the efficiency of the farming process,
save time, and money.
7. WasteWalk
An innovative e-health application for elderly
people in the field of patient communication
and interventions that promote lifestyle
changes.
8. WEP
Wireless Energy Protocol. Charges the
Electrical Vehicle efficiently and safely by
using patented inductive power technology
(wirelessenergyprotocol.com).
All the interviews were based on the phenomenon of “entrepreneurial ecosystems”,
and according to this, seven main categories could be formed, all of them interconnected
with each other. It could also be observed that one result, or one statement related to a
specific part of the project could be related to more than one element of the ecosystem, but
the reason for this is that the ecosystem is viewed as a holistic system, where the different
pillars are interdependent, interconnected and can affect each other. The main categories
identified on the basis of the interviews are the following:
37
4.2. Accessible market(s):
This pillar includes the local and the global opportunities open to the products the
teams are developing, and explain the reason why that specific product could be successful
on that market, and also mentions the possible first customers, and the reason why the
product could be beneficial for them. Due to the multicultural nature of the teams in the
Amsterdam Hub (explained in detail later) the terms “local” and “foreign” markets can be
somewhat confusing, therefore in the context of the thesis, and the research, “local” market
means The Netherlands, and “foreign” markets refer to all European countries apart from
The Netherlands.
Teams believe that they got selected into this programme, because their highly
innovative product has a potential on the market, and at the same time they could give
something back to the European Union as well. It is true that most of the products in the
programme are really market ready. Each product is “smart” as it is connected to IT and/or
the Internet of Things, and is meant to make life easier, and more efficient. Foreign Teams
located in Amsterdam are grateful for the opportunity to participate in this project with their
products, because their home-countries do not provide enough opportunities for them, or the
entrepreneurial environment and culture are not developed highly enough for them to
promote their devices there.
Different teams experience different aspects of life in The Netherlands. One team has
its physical device in Bulgaria, and since it is presented and tested in a showroom, they are
physically connected to Bulgaria in order to test and develop their product. They travel
between Amsterdam and Sofia, in order to collect points, take part in workshops and benefit
from mentoring. They cover the travel expenses from the money they receive from
SpeedUP! Europe. Another reason why they have the prototype abroad is that they couldn’t
have covered the costs related to the device in The Netherlands.
38
All teams made some preliminary calculation, and market research concerning their
products' potential on the market. If the product aims to improve health, decrease costs, or
protect the environment it can be beneficial for all individuals.
“What we do is disruptive. We charge electrical vehicles wirelessly. There is
absolutely no company that does what we do. At the beginning of 2014 there were about
200,000 charging points in the world for electrical vehicles. By 2019 there will be
20,000,000, so there is a huge estimated growth, and there will be a big demand for this kind
of products.”
The interviewees think that The Netherlands is an optimal place for realizing their
ideas, as it is described in the section entitled “Culture”.
4.3. Culture in The Netherlands
The Netherlands enjoys an extremely good location in Europe, when it comes to
entrepreneurial activity. It is one of the most innovative countries, it is really easy to reach,
and the penetration of the English language is extremely high, which makes communication
with institutions really easy. Team leaders coming from abroad mentioned that due to the
positive “image” of the country, they are trusted more if they present themselves as a Dutch
startup, or a company operating in The Netherlands. All teams agreed that Holland is an
optimal place for starting a business, and get their ideas realized.
“Dutch people are very liberal, open minded and straightforward about getting
business done.” – stated one team member coming from abroad. In Holland they have more
options for entrepreneurship, such as business incubators or accelerators, it is really tax
39
friendly, startups receive tax benefits, and the chances to get funding are bigger. The history
of Holland is also important in this respect, if we look at colonialism for example. It is also
attractive for non-EU people to start their business here, because regulations suggest the
startup visa.
Three interviewees mentioned The “Startup Delta” in The Netherlands, as a good
example for the stimulation of entrepreneurship in the country. Startup Delta is an ecosystem
for startups that aims to boost entrepreneurship where startups, investors, launching
customers, governments and knowledge institutions work together (startupdelta.org, 2015).
All team leaders and members agreed that the idea of SpeedUP! Europe is really
positive, and creates value for them. The teams had different motivations for joining the
programme but most of them admitted the important role the grant had played in their
decision.
The project significantly reduced the fear of failure, and encouraged participants to
take risks. The fact that they would not have to pay back the money if they failed was
extremely positive for them. It was interesting that in the project there were two types of
entrepreneurs. On the one hand there were young professionals, who applied for the grant
with their very first startup. On the other hand, there were experienced entrepreneurs and the
way they approached the project itself, or handled certain issues within the programme was
completely different.
Summing up the responses given by the teams, we can state that SpeedUP! Europe
definitely adds value to and supports entrepreneurship, but does not have a major impact on
it, due to the small number of teams operating in the Amsterdam Hub. In Hamburg, it does
have an impact, if we approach it from an entrepreneurial and branding perspective.
40
4.4. Regulatory framework
Since SpeedUP! Europe is an acceleration and support programme funded by the
European Union and part of the European Commission’s Future Internet Public Private
Partnership Program FI-PPP mentioned before, all projects need to meet specific
requirements and face strict regulations. Within this category there are three subcategories
that teams often mentioned as an issue within the project.
4.4.1. Bureaucracy and Administration
As it has been mentioned before teams have to meet certain criteria in order to take
part in the project. EU Projects are often seen as bureaucratic, complex and burdensome. In
order to gain access to EU fundings, stakeholders need to deal with bureaucracy,
administrative forms, and they need to understand EU policy. There are strict accountability
and auditing rules, monitoring that the money is spent in the right way. Filling out different
forms and time sheets often seems to be a waste of time, preventing people from spending
enough time on their own development (Wolinsky, 2010). On the other hand, teams
understood and accepted the need to deal with paperwork as long as it did not interfere with
their own development.
“It is a lot of work, and it’s overdone. You need to tell every penny where it goes, and
I’d be developing instead of dealing with administration” – stated a team leader.
Giving away a lot of money for free will not create sustainable businesses, so
entrepreneurs really need to work hard, and prove that the business they are doing is worth
41
the money allocated. At this point the question arises: is entrepreneurship compatible with
bureaucracy? Entrepreneurship requires flexibility, and improvisation; sometimes people
need to make quick or risky decisions, however, European Projects do not operate this way,
as we have seen before. Does it suppress entrepreneurship; does it have an effect on
creativity? When we came to the question whether Speedup Europe projects need to operate
as lean startup the answer was quite ambiguous. According to the coordinator there are
elements of a lean startup in the project, but its implementation is bureaucratic. He also says
that for a European Project it is quite lean, but for an entrepreneurial project it is really
bureaucratic.
4.4.2. Milestones
Teams with the best proposals who got selected into the project have to pass certain
stages within the 9 months. They need to show development during each stage, and if they
fail to meet the criteria, they are not allowed to continue any further. This is how the system
motivates them to improve. Each stage is based on a point collecting system, with a
maximum score of 30, where teams need to collect a certain amount of points in order to
pass the stage in question. The first stage was about creating a Minimum Viable Product, a
prototype. The second was about selling their product, and finding their first customers.
Point collection is based on how actively and successfully there participate in the project.
Teams complained that the rush to collect the points is not compatible with the
development. Travelling to Hamburg takes up a lot of time and money, and they’d rather
focus on their own development, than be under control all the time. They felt this was in
conflict with the individual characteristics of the entrepreneur.
42
On the other hand, half of the teams mentioned that it was completely understandable
that there were a lot of rules and administration, because an objective tool was needed to
judge teams. They thought that the root of the problem was that before the start of the project
the coordinators were not prepared for all the administration 100 teams would require and
the coordinators were simply overworked. The project structure was really complicated, and
a lot of decisions were made in the last minute, they communicated things really late, and
this caused a lot of confusion.
4.4.3. The Hamburg Hub
There are several physical hubs located in different parts of Europe, but the centre is
found in Hamburg, Germany. Most of the teams are located there, and as it is seen on the
official website of SpeedUP! Europe, the ratio speaks for itself. This is the reason why most
activities are organized there, and therefore the hub there has a much more intensive life.
Figure 7. Companies and Team leaders from 13 European countries (speedupeurope.eu)
43
All interviewees experienced a significant difference between the hub located in
Hamburg, and their hub in Amsterdam. In Germany the hub is really active, they have a big
working space, and most of the events are organized there. Two team leaders were on the
opinion that it was really strange that 80% of the teams came from Hamburg although
SpeedUP! was supposed to be a European project. 7 out of 8 teams felt like the Amsterdam
hub was too small therefore it had difficulty to make a huge impact, and they felt like they
were “missing out” a little bit in comparison. On top of these, the best teams got additional
20,000 euros at the second milestone, but teams in Amsterdam felt that all the top teams
were in Hamburg.
Another problem mentioned several times is related to the differences in the flow of
information. Teams is Germany have a much more direct contact with the SpeedUP! Europe
organization, so they get to know all the information in advance. There are also a lot of
informal discussions going on, more than with the teams located outside Germany. This
means that they have a considerable advantage, because in this highly competitive
environment, information has great value. Those who have early access to it develop faster
and improve better.
There is a correlation between Hamburg, and the collection of points. Team leaders,
team members, and also the coordinator of the Amsterdam hub stated that there was a
confusion at the beginning of the project, because before signing the contact they didn’t
know about the milestones they were supposed to pass, or the point collection assigned to it.
This is an important issue, because participants outside Germany need to travel a lot to
Hamburg, to attend events there in order to collect points. On the one hand it takes a lot of
time, and, on the other hand the travel costs which they have to finance from the budget
granted for SpeedUP! Europe, are not negligible either. Basically, the time and money spent
on travelling could be invested into their own development. Obviously, German teams do
44
not face these problems. Workshops are compulsory, if you do not participate, you miss
points out of the total 30 and you risk not passing the next milestone.
“There was a compulsory workshop; if you miss it you miss one full point out of 30. I
was in Hamburg, and there was a German tax-lawyer talking in German about German
taxes, which was completely useless for us”
This system could work, if the events were allocated evenly among the hubs. One
acceptable explanation why they failed to have an even distribution between German and
non-German teams was that most of the promotion concerning FIWARE and the SpeedUP!
had been around Germany, therefore a lot more German teams applied for the grant, and
there was a better chance for selection. There were several promotions in The Netherlands as
well, there was a FIWARE meeting in Utrecht, and there was a SpeedUP! Europe
introductory meeting at the University of Amsterdam.
4.5. Support mechanisms
The category of support mechanisms must be highlighted in this project, together
with all its elements that contribute to the development of the individual projects, and
ensures all the necessary conditions that can play a role in their success.
4.5.1. The Amsterdam Hub
There is a physical location provided for the teams selected, which functions as an
office space for the entrepreneurs, and provides a “business environment” for them where
45
they can work together, make new connections, share ideas, and develop their projects
further. The hub is found in a splendid environment in the heart of Amsterdam.
Teams were extremely satisfied with the location of the hub. It is in the very centre of
Amsterdam, really close to the train and metro stations, so it is easy to reach. The view and
the building itself were splendid. Teams think that the amount they pay for the rent is really
expensive for such a small place, mainly because they need to finance it from the grant they
receive, but Amsterdam in general is quite an expensive city.
Teams also mentioned that they were really satisfied with the service in the building,
the manager was really kind and helpful with them, and people they met there were all
actively trying to make a connection with them. What they miss is spending more time in the
hub. Since there are only 9 teams, and most of the teams have their own offices either
somewhere in The Netherlands, or abroad, where they stay most of the time. This is because
they have all the devices, equipment, and special instruments that they cannot bring into the
hub, it is therefore difficult for them to manage to be there all the time. Younger
entrepreneurs with less experience stay more often in the hub, since they do not have other
places to work, this is ideal for them.
Due to administration problems, teams started working with a month's delay, since
they had no hub at the beginning, because at first there were no plans for one in Amsterdam.
Once the hub was provided for them, they mentioned that they’d be happy to see more
events organized there, and teams from other locations, like Hamburg or Stockholm could
come to the Amsterdam hub as well.
For most of the teams in SpeedUP! It is not possible to spend as much time in the hub
as they want to, because they are all working people, with other responsibilities too; they are
busy with their other projects as well, they have the startup in addition to their original jobs,
and can devote only a certain amount of their time to developing the new product.
46
Members also have difficulties with the Internet. Wi-Fi connection is not always
stable, and it is quite slow, which is not quite compatible with IT related projects.
4.5.2. FIWARE accelerator
The entrepreneurs participating in the programme build upon the FIWARE
technology, which they can use to develop their highly innovative applications. It is a
library, a platform and a framework at the same time, which provides a cloud-based
infrastructure and delivers Future Internet applications and services.
All the teams stated that the idea behind FIWARE is really good and useful, and
definitely necessary. What they see is that FIWARE solutions are similar to the ones found
in the U.S., and to avoid confidentiality issues, Europe needs its own separate system as
well. FIWARE is composed of generic enables – such as Data/Context Management, IoT
Services Enablement, Advanced Web-based User Interface, Security, Interface to Networks
and Devices, Cloud Hosting and Architecture of Applications - the development of smart
applications (FIWARE Catalogue, 2015). Every team can make use of some enablers
however, the teams in general complained about FIWARE for several reasons:
1. FIWARE is not stable: They had to cope with a lot of problems; the general view is
that it is not secure. The whole system is not completely reliable; the service might cause
surprises at any moment.
“There are many modules we would like to use, and we already worked with some of
them, but there is still a lot of improvement to be done”
Three of the teams mentioned - that was supported by the coordinator too – that they
did not fully understand these problems related to FIWARE. If the EU had invested such a
huge amount of money in the development of the system why was still not working
47
properly? They believed that FIWARE was meant to be the cornerstone of IT development,
and the fundamental technology for European businesses. Now that the EU had invested a
lot in the development of FIWARE, it obviously wanted people to use it. It would also be
necessary to prove that developing such a system was worth the investment, and it was not a
waste of money. All teams stated, that they had seen some improvement as compared with
the beginning of the project, but there was still a lot to be done.
2. FIWARE is too complex: Although it is a public and royalty-free platform, it is
difficult to use. The reason why the respondents found it too complex is that they did not
really get any training about how to use it. According to a team member, they participated in
workshops on FIWARE, but they didn’t receive enough training enabling them to use it.
All in all, what can be concluded from the interviews is that the main goal of
SpeedUP! Europe is to promote FIWARE, not to stimulate entrepreneurship.
“In this case, the outcome is a business using FIWARE, and the tool for it is
entrepreneurship” /Hubmaster/
Opinions are quite contradictory: On the one hand, it certainly has a good potential to
deliver software solutions, and it offers a lot of opportunities for the teams, which they can
make use of, however, in practice there are a lot of things that do not work yet.
4.5.3. Network of entrepreneurial peers
Due to its professional environment SpeedUP! Europe offers several opportunities to
meet new people, and make valuable connections. Successful entrepreneurs understand the
value of networking, which can happen among like-minded people who participate in the
same project, or any other activity (workshops, meetings, seminars or webinars) organized.
Different kinds of stakeholders should take advantage of the opportunity offered by such
48
programmes and make the most out of constant networking, mentoring, and cooperating
with professors, industry experts, venture capitalists, and of course other entrepreneurs etc.
Teams are connected with each other in the hub, they share ideas, help each other, but
due to the pressure of the programme it does not always work. Firstly, every team is
concerned about their own development; the goal is to get the maximum points.
In the office there is a common area, a space for co-working entrepreneurs – mostly
freelance workers are there – with the concept of Seats2Meet. The idea is that they have a co-
working lounge for free, they pay with social capital, and they are open for new connections.
Next to the common area there is an office rented just for the teams working in SpeedUP!
Europe. Friday is the official day, when the teams assemble in the hub to share ideas,
experiences, have meetings and discuss issues. There is not much competition going on
within the teams, rather co-operation. A couple of teams think that the small number of teams
in Amsterdam is better, but the majority would more happily be in a bigger and more active
hub, just like the one they have in Hamburg. Those who are in favour of the smaller hub,
think that fewer teams have better focus; otherwise everything gets too chaotic. There are
always discussions going on, synergies happen all the time. One team member said that they
had just met a product designer in the hub, who might help them in the future, and another
leader was extremely enthusiastic about networking, because they had started working on an
other, completely new project with one of the other teams in the Hub.
One team member said that they made extremely useful communications in slack
community. This is a messaging app for teams. Teams are invited into forums and channels
called ‘speedupeurope’ with all the team members participating in the programme,
‘amsterdamhub’ or ‘IoT’. These are very active forums, and perfect for sharing information.
Teams are really happy to exchange experience and knowledge with others, and the best thing
about it is that it can happen online.
49
4.5.4. Grant from the European Union
Teams receive 50.000 euros during the project, transferred to them on a monthly basis.
However they need to show specific progress, and fill out administrative forms in order to
prove that the money was spent wisely, and in the right way. Accountability - associated with
a lot of administration and weekly reports - is really important in this case.
Three main motivational factors were observed, why teams applied for the project and
sent in their proposal. Obviously, the majority of the teams applied because of the grant. They
were really happy that they did not have to give up shares in order to receive it, and in case of
failing, they would not have to return the money. There is a general failing ratio of startups, so
the teams take risks with their projects in SpeedUP! Europe also, but with no equity, it offered
a perfect opportunity for all the teams. It significantly reduced their fear of failure, and
encouraged them to take risks. Secondly, the software solutions were appealing to them, and
thirdly they liked the networking opportunities. They found these three elements a good
combination, and a really good offer.
Different entrepreneurs, handle the grand-related issues in a different way. As it was
mentioned before, the grant was crucial for the young, less experienced entrepreneurs to
survive. They see whole programme more educational and they learn a lot, both from the
trainings and from other entrepreneurs. On the other side there are the more experienced who
have other businesses and already know how to set up a business, handle issues etc. They see
the programme mostly as extra money, and a way of financing innovation.
The teams mentioned three issues related to the grant. The delay (1), the hub rental
and accommodation (2) and the travel costs (3). They had expected to allocate a part of the
grant on these expenses but since they had to travel a lot, and living expenses in Amsterdam
are really high, they were not satisfied; costs proved to be really high and unreasonable. Most
50
of the teams are not Dutch, therefore they needed either to (1) rent an apartment in
Amsterdam in order to be in the hub, attend meetings etc., or (2) to work from abroad but in
that case travel to Amsterdam on a regular basis and pay for hostels. In this case they had to
spend extra money on travelling. On top of all, most of the events took place in Hamburg,
therefore teams paid with their time as well because even in the case of a short event they had
to spend at least two days there, book a hostel, and pay for the ticket from their own budget.
There were problems with the payment of the grant as well. Teams did not receive the
money in time. The grant they won, was supposed to be transferred on a monthly basis
(50,000 euro in total), but for some of the teams the grant was two months late. In every
business entrepreneurs need to calculate their cash flow, and make a budget plan; therefore it
was unexpected to have so little money upfront. This is sort of a paradox situation because if
they do not receive the money, they are unable to come up with something, but at the same
time, if they do not develop, and collect enough points they drop out of the programme at the
next milestone. Luckily most of the teams have other businesses as well and have their own
income, some of them even got a bank loan; anyway, they can use those sources to go on with
their project. The reason for the delay was put down to problems with the administration
behind it. According to the teams, the consortium had not calculated well enough how much
administration would be needed to handle all project issues. There was shortage of staff
people working on the project seemed to be really overworked. There was only one person to
check the invoices and transfer the money so everything was too centralized.
Fortunately, it was also obvious that teams had an entrepreneurial mindset. When
teams faced barriers and challenges, they never even got close to giving up. All of them
immediately started thinking of alternatives, of how to manage the problems and fix them.
They knew that they were going to receive the money sooner or later. Most of them were
51
optimistic and passionate about their product. They said that there is always a chance for
failing, but they should move on, start something new, or do it in a different way, so they
should not see it as a failure, but an experience.
4.5.5. Coaches and mentors
SpeedUP! Europe programme works as an accelerator, where teams- in addition to the
many other services (funding, training etc.) -, are assigned to experienced mentors coming
from various business environments, who are able to give objective and professional advice to
each team during the project. According to the team leaders, they try to find the best match
between the teams and the coaches, to make the mentoring ideal. Coaches are responsible for
monitoring the progress of the teams, and signing their weekly reports.
Most of the teams can work with their mentors efficiently. It gives them confidence if
they receive a positive feedback from their mentor, and some of them are really involved in
the business development of the projects. Coaches come with different backgrounds. They
have expertise in sales and marketing, a couple of them are professors at the University of
Amsterdam. A team even changed their mentor, for a better match.
“We had a really fruitful discussion with our mentor. We received great help on a
professional level. It is good to have an outsider, who gives constructive criticism, and we are
happy to have this opportunity”
Some experienced team leaders stated that they did not necessarily need somebody to
holds their hand all the time, but they agreed that it is always good to listen to an expert’s
ideas. Only one leader mentioned a mismatch between their project and the coach, but this
was not because the mentor did not want to cooperate, but their original mentor was a
52
professional in crowdfunding. For their product crowdfunding could not be an opportunity, so
they are looking for other funding alternatives in the future.
4.6. Entrepreneur-specific trainings and education
Within SpeedUP! Europe, teams are allowed to take part in specific trainings and
workshops with the purpose of getting education and learning, which allows the participants
to be more efficient in their development. Such specific trainings give them the skills
necessary to be successful with their startup. One big upcoming event for the teams is a tour
to Silicon Valley, which seems to be a really great opportunity for teams to gain a new insight
into entrepreneurship. They also attended workshops and webinars on topics like
crowdfunding, sales, social media, social entrepreneurship etc., however, a look at the events
published online (eventbrite.de) makes it obvious that most of the workshops took place in
Hamburg.
4.7. Universities as catalysts
A significant number of the team Leaders or team members come from prestigious
Universities in The Netherlands, such as the University of Amsterdam or Erasmus University
of Rotterdam, where they studied business, entrepreneurship, engineering or other relevant
fields, which they can utilize in their project development. However, many of them come
from abroad, and studied abroad, and now they make use of their knowledge in The
Netherlands.
The participants found education in The Netherlands really stimulating. For instance
there are several organizations within universities, like the Erasmus Centre for
Entrepreneurship Student Association (ECE Students), which is a student-run association,
contributing to the entrepreneurial ecosystem on the campus of the Erasmus University
53
Rotterdam that aims to gather students who have the entrepreneurial spirit in their minds and
would like to become entrepreneurs in the future.
It is also important to mention that the University of Amsterdam is an academic
partner of the SpeedUP! Europe programme. The partnership is realized by the Professors of
the University working in the programme as mentors, and MSc students conducting their
research in collaboration with the SpeedUP! Europe members.
4.8. Providing access to capital
Teams – in addition to the grant they received – look for opportunities to get
additional funding. The opportunities are better in The Netherlands, but they need to work
hard to convince investors to put money in their product.
Teams received some education on fundraising. They had workshops, different kinds
of presentations on crowdfunding, and there were events also, where they met investors. Most
of the teams mentioned crowdfunding – which is continuously growing in The Netherlands -
as an alternative solution to receiving extra money, and this method of financing is also a
good opportunity to receive feedback from the crowd.
“We need to develop one crucial part which is the microcontroller, and we are using
crowdfunding for that. So we crowdfund the core part of the product, and after the
development of the microcontroller in a high quality, we can move further, and tackle the
road measuring system”
There are teams for whom crowdfunding does not seem to be the best option, but they
seek other options, like health insurance companies, or municipalities to partner up with. One
team leader said that they were satisfied with these presentations, but each team had a
different product, and for each idea a different kind of funding would be optimal, therefore
54
they noted to receive individual support for fundraising, not only from collective events.
Both the teams and the hubmaster - who is an expert in crowdfunding – think that it is
extremely difficult to predict, or measure in advance whether the project would increase the
chance to get funded at the end, but most of the teams were optimistic in this matter. They
believe that it might open some doors for the startups. Some of them believe that it does not
really increase the chance to get funded, just accelerates the whole process and gets the stage
ready for funding. Basically this is what accelerator programmes are for.
One of them already had the opportunity to get equity-funding, but he rejected the
offer, saying that the product was in an early stage at the moment, and he would rather wait
till the end of the programme when the product was more developed.
Most of the startups had already made agreements with investors, companies, or
municipalities. For most of them, the first step was to scale up their product with the grant
they received from the SpeedUP! and after further development take the second step and co-
operate with them.
55
5. Discussion
After analyzing the ecosystem pillars using the information gained from the interviews
conducted with team leaders, team members and mentors, it became possible to set up seven
main categories that are in line with the entrepreneurship ecosystem, namely (1) Accessible
Markets (2) Culture in The Netherlands (3) Regulatory Framework (4) Support Mechanisms
(5) Entrepreneur-specific trainings and education (6) Universities as catalysts and (7) Access
to capital. These categories are in line with Drexler’s (2014) main pillars, and correlated with
the report on the Global Startup Ecosystem, in which Amsterdam entered into the top 20 with
its startup ecosystem. It became clear that almost all elements of the ecosystem could be
recognized in the research findings, but the goal was to find the role of SpeedUP! Europe
within the ecosystem in The Netherlands.
Entrepreneurs do believe that their dreams could be realized in The Netherlands,
however, this is not specifically attributable to SpeedUP! Europe itself, but the whole history
and culture of The Netherlands. There is no doubt that the programme can be listed among the
success stories of The Netherlands, nonetheless it is difficult to estimate in advance the
influence of the whole programme on the ecosystem, because the work is still in progress.
Moreover, how sustainable these startups will be is also a question that can only be answered
once they are out of the programme successfully, having passed all the milestones.
In spite of its small size, Holland is full of entrepreneurs, innovation and foreign trade,
and this is the reason why a lot of companies have their headquarters in Amsterdam, and also
the reason why there was a hub located in Amsterdam for entrepreneurs. The assumption was
that progress can be made easier if teams gather in a city known to be a great place to live,
and affordable for nascent startups. However, the responses did not bear out this statement
completely, because the majority of the team members came from outside The Netherlands,
from less developed countries like Bulgaria, Lithuania or Spain. For them living expenses in
56
Amsterdam represented a problem. They found the office rent, accommodation and travel
costs extremely expensive, and they spent considerable amounts on these from the grant they
received. It was also assumed that the chances to get funded were higher in The Netherlands,
and the environment was more stimulating in terms of networking opportunities but they
found that developing their prototype, and testing it on the market was a lot more expensive
than in their home country.
The programme offered excellent conditions, where different elements were offered
together as a “package”, which was barely seen before. This offer was unique because it
supported innovation, and at the same time offered a grant, allowed entrepreneurs to network
and gave them mentoring support. On the whole it was a great initiative on the part of the EU,
and all the teams collectively agreed on this.
All teams believed that there was an accessible market for their product, since they got
selected into the programme with their proposal. It was also observed that a lot of foreign and
multi-cultural teams were allocated to the Amsterdam hub, since The Netherlands provide
much better conditions for them; however, it is a really competitive environment where tech-
startups are “booming”. Their self-confidence was supported by the fact that companies,
municipalities and private investors had already given to most of them an offer for
cooperation or for the integration of their product into their portfolios. This is a positive
development, considering how low the Netherlands scored on access to capital for startups
according to the Global Ranking. It scored low because it is difficult to get funded, especially
if the product is technology related and quite risky. Since all the products in the programme
are IT related, they obviously scored high on risk. SpeedUP! Europe was a perfect initiative to
increase the flow of capital because (1) it offered a non-refundable grant for tech-startups, (2)
it helped startups to reach stages, where they could have their first prototype, and their
technology developed. This increased their chance at the end to get funded by business
57
angels, or VCs or some other type of funding. By the time the project ends, the startups that
have passed all the stages, will have received plenty of feedback about their product's
potential, and they might have already found new investors. They have continuously
developed their product and passed the stages, have participated in numerous activities, which
contributed to the development of their entrepreneurial skills. All these can be considered as a
proof for future investors that the product can succeed on the market at a later stage, even if
they do not have a positive cash flow at the moment of investment. With all these
considerations in mind we can say that SpeedUP! Europe reduces the risk for both the
entrepreneurs and future investors, because startups receive non-refundable grant, and
investors will have a pool of tech-startups, which are in a stage where they can estimate their
chances on the market a lot better.
However, there were some problems regarding efficiency. According to the teams, the
whole programme could have been better, if the coordination, and administration behind the
project had been more professional. Their statement is explained in the following paragraphs.
The regulatory system was extremely divisive, or rather negative. Teams had to cope
with a lot of obstacles created by EU bureaucracy, which came out to be really frustrating. All
of them were complaining about unnecessary regulations, and unreasonable paper work,
which did not create entrepreneurship friendly conditions for them, and held them back from
developing their product. The main problem, however, was not connected with these issues,
but with the way these issues were handled, and the fact that they were not informed about the
conditions in advance. They stated that it diminished their initial motivation because a lot of
regulations were announced during, not at the beginning of the programme, which they found
extremely unprofessional. There was a lot of confusion around the milestones, how the
projects were rated, and the flow of information turned out to be really slow.
58
A really interesting problem came up at the end of the interviews, namely the issue
related to the Hamburg hub. 80% of the teams, including the best were concentrated there;
therefore it was not difficult for them to have a major impact on the startup ecosystem in
Germany. Teams did not understand the huge contrast between Hamburg and the rest of the
hubs, both in number and performance. It is true, that with 9 teams in Amsterdam, it is
difficult to create a major impact on entrepreneurship.
The analyzis of the support mechanisms revealed some elements that came out to be
really positive, however there were others that did not perform that well. Mentoring and
coaching scored the highest among the teams; almost all of them rated their mentors
positively. For experienced entrepreneurs, mentoring was not as important as for the less
experienced ones, however they were happy to take advantage of all objective advice they
were given. As to the rest of the teams, positive feedback or constructive criticism from their
coaches made them really enthusiastic, and encouraged them to continue their development.
Networking opportunities offered by the programme came out to be positive as well.
Despite the fact that German teams seemed to be more effective in collaborating and network
building, teams in Amsterdam tried to make the best of their opportunities. One team has
already started working on a new, but different project with another team. They take good
advantage of the other freelance people working in the office, and they continuously try to get
some new ideas via slack community. The only thing that they miss is the “bustle”, due to the
small number of teams located in Amsterdam.
One really interesting finding was that the SpeedUP! Europe programme was
advertised as a ‘business stimulating entrepreneurship’, but it turned out in the end that the
rationale behind the whole programme was the promotion of the software FIWARE, and the
goal was not directly the stimulation of entrepreneurship, but an increase in the number of
businesses using FIWARE. Entrepreneurship was just a tool in this case, not the outcome,
59
although indirectly it did create new businesses, and new startups, so it did add value to the
ecosystem, even if the original purpose was the promotion of the software usage. In
conclusion it can be stated that the idea of FIWARE is extremely good, however it needs to
develop into a more stable, and reliable system. If it were able to serve its purpose up to
100%, this kind of promotion would not be necessary, because startups would be eager to take
advantage of the opportunities it provides them.
Turning to the grant, we conclude that it is always beneficial to receive money, and it
does accelerate the development of the products, but the administration of the grant turned out
to be rather chaotic. If the goal is to create successful startups for whom money is crucial,
then delays are not acceptable, because it holds them back from their development, especially
if there are milestones in between. Many of the teams tried to finance their products from
their own savings, however in such cases money is never enough, therefore teams started
looking for other sources.
Such accelerators could not work without proper office space. Teams were given
centrally located offices in Amsterdam, however they did not take full advantage of them
since most of them continued to work from their own offices. The teams agreed to spend only
one day per week there, which they found satisfactory. Apart from the exorbitant rent it did
serve the purpose of an office.
SpeedUP! Europe organized several events for the teams covering all kinds of topics.
These were extremely valuable, and helped them extend their knowledge of entrepreneurship.
The only problem was that most of the events took place in Germany; therefore teams had to
travel a lot. They did benefit from these events; however, the main factor motivating
participation was to collect points. In conclusion we can state that training -wise, the
programme performed well. A couple of teams complained about the language of the events,
60
because they said some of them were in German, but most of them only complained about the
location, not the quality of the workshops.
Looking at the education system in The Netherlands, we find that top ranked business-
schools are located here, which give students a comprehensive entrepreneurial mindset during
their academic years. A significant of the team members had studied in The Netherlands, and
some of them were members of student associations related to entrepreneurship. As it was
mentioned before, the University of Amsterdam is a partner of SpeedUP! Europe, and its
students could benefit from the programme. In conclusion, such programmes do attract talents
to the country, and due to the excellent education system in the Netherlands, the number of
tech talents is growing rapidly.
All in all, the answer to the research question is: yes, the programme SpeedUP!
Europe contributes to the development of entrepreneurial ecosystems in The Netherlands,
however, due to the small number of the teams located in Amsterdam it does not create a
major impact. It definitely stimulated the foundation of successful startups, however with a
more professional organization, and less bureaucracy behind, it could have had a deeper
impact, and could have contributed more to the entrepreneurial ecosystem.
61
6. Conclusion
This master’s thesis was written to investigate the role of SpeedUP! Europe
programme in the development of entrepreneurial ecosystems in The Netherlands. SpeedUP!
Europe is a ground-breaking and disruptive acceleration and support system of the European
Union, which aims to boost entrepreneurship and stimulate the formation of successful
technology related startups within Europe.
After a brief introduction, a comprehensive and profound review of the relevant
literature explained the meaning and the elements of an entrepreneurial ecosystem, which was
followed by a summary of the macroeconomic indicators and the current conditions of
entrepreneurship in The Netherlands. This section gave an interpretation of the startup
ecosystems in Amsterdam, which served as a baseline for the research, and a basis for
comparison in the analysis of the responses obtained during the interviews.
As part of the research, 10 interviews were conducted: 5 with team leaders, 4 with
team members and 1 with the coordinator of the hub located in Amsterdam.
. SpeedUP! Europe turned out to be beneficial in terms of fostering entrepreneurship,
however the reason why it failed to achieve even bigger impact is found in the lack of
preparation in the field of administration, and the slow flow of information. On top of it, there
were only nine teams working together in the Amsterdam hub, which was considered to be
too small to have a huge effect on startup ecosystems, especially if there are several other
successful accelerators and incubators operating in The Netherlands.
It is also important to mention that projects announced by the European Union are
really strict in regulations, and there are certain criteria, and rules that participants must
follow otherwise they are not eligible for the grant. Taking all these issues into consideration,
entrepreneurs who plan to apply for such programmes in the future need to be aware of these
issues, and also be able to invest enough time in it.
62
Luckily, SpeedUP! Europe was a good initiative on the part of the European
Commission, to increase the flow of capital into the country, especially because technology
related startups due to the risks they involve have difficulty in finding investors, especially at
an early stage. With the grant, and all the support they received the startups were able to
develop their products to a stage, where they became more stable, and more ready for the
market.
In conclusion it should be noted that the research has some limitations. The results
were restricted to the teams' opinions, which could be quite biased. They are the ones who are
deeply affected by the programme, and are emotionally involved with it, so they might have
overstated certain issues that came up during the programme. Another point is that since there
was a huge contrast observed between the teams in Hamburg and the teams in Amsterdam, it
would have been interesting to make a deeper analysis of the conflicting views. Thirdly, The
Netherlands is famous for its successful companies, high-growth startups, and prosperous
economy, and it would have been interesting to see, how SpeedUP! Europe could have an
effect in less developed European Union countries.
63
7. References
1. Aernoudt, R . (2004). Incubators: Tool f o r E n t r e p r e n e u r s h i p ?, K l u w e r
Academic Publishers. Small Business Economics. Vol. 23: 127–135.
2. Altena, T., Tuinenburg, P., Eveleens, C., Rijnsoever, F., (2014) Climate-KIC Scout
Report – Start-up funding The (mis)alignment of financiers and start-ups in The
Netherlands. Climate-KIC – Knowledge and Innovation Community.
3. Blank, S. (2013) Why the Lean Start-Up Changes Everything. Harvard Business Review.
Retrieved from: https://hbr.org/2013/05/why-the-lean-start-up-changes-everything
4. Brouse, S. H. (2002), Interpreting Qualitative Data: Methods for Analysing Talk,
Text and Interaction, 2nd edition by David Silverman. Sage, London, 2001, 325 pages.
Journal of Advanced Nursing, 37: 607.
5. Drexler, M. (2014). Entrepreneurial ecosystems around the globe and early-stage
company growth dynamics. Cologny/Geneva: World Economic Forum.
6. European Commission (2012): Communication from the Commission to the
European Parliament, The Council, The European Economic and Social Committee and
The Committee of the Regions – Entrepreneurship 2020 Action Plan – Reigniting the
entrepreneurial spirit in Europe. Brussels, 9.1.2013 COM(2012) 795 final
7. FIWARE Catalogue. (2015) The official website of FIWARE. Retrieved from:
http://catalogue.fiware.org/
8. FIWARE. The official website of FIWARE Accelerator Programme.
http://www.fiware.org/fiware-accelerator-programme/
9. Fundingbox. (2014). Speed Up! Europe. FundingBox. Retrieved from:
http://www.fundingbox.com/e/grants-for-entrepreneurs-from-speedup-europe-project/
10. Gage, D. (2012) The Venture Capital Secret: 3 out of 4 Start-ups Fail. The Wall
64
Street Journal. Retrieved from: http://www.wsj.com/articles/
SB10000872396390443720204578004980476429190
11. Gemein, O-G. (2014). Interview with Olaf-Gerd Gemein, Program Coordinator of
SpeedUP! Europe. “Entrepreneurs are made, rather than born.” Fipedia. Retrieved
from: http://fipedia.eu/speedupeurope/
12. Gephart, B. (2004) Qualitative Research and the Academy of Management Journal.
Academy of Management Journal, 47(4), pp. 454–462.
13. Hermann, B.L., Gauthier, JF., Holtschke, D., Berman, R., Marmer, M. (2015). The
Global Startup Ecosystem Ranking 2015. Compass.co. Pp. 122-126.
14. Hoffmann, A. N. (2011). Promoting Entrepreneurship – What are the real policy
challenges for the European Union (EU)?, The MIT Press, Perspectives on the
Performance of the Continental Economies, Chapter 4. (p.91).
15. Information from the slides of the ‘Thesis Workshop Qualitative Research / Case Studies’
course
16. Isenberg, D. J. (2010). How to start an entrepreneurial revolution, Harvard
Business Review (88:6), June 2010, pp. 40-50.
17. Isenberg, D. J. (2011): The Entrepreneurship Ecosystem Strategy as a New Paradigm
for Economic Policy. Principles for Cultivating Entrepreneurship. The Babson
Entrepreneurship Ecosystem Project. Massachusetts: Babson Global.
18. Isenberg, D. J. (2014) What an Entrepreneurship Ecosystem Actually Is. Harvard
Business Review.
19. Kim, J-H. & Wagman, L., (2012). Early-Stage Financing and Information Gathering:
An Analysis of Start-up Accelerators Midwest Finance Association 2013 Annual
Meeting Paper. Available at: https://editorialexpress.com/cgi-
bin/conference/download.cgi?db_ name=IIOC2013&paper_id=48
65
20. Kim, J-H. & Wagman, L., (2012). Portfolio Size and Information Disclosure: An
Analysis of Start-up Accelerators. Midwest Finance Association 2013 Annual
Meeting Paper. Available at SSRN: http://ssrn.com/abstract=2142262
21. La Rovere, R., Ozório, L., de Jesus Melo, L. (2015) Entrepreneurship in BRICS -
Policy and Research to Support Entrepreneurs. Springer International Publishing
Switzerland. Part I. Entrepreneurial Environments, pp. 9-27.
22. Mason, C. – Brown, Ross. (2014) Entrepreneurial Ecosystems And Growth
Oriented Entrepreneurship. Background paper prepared for the workshop organized by
the OECD LEED Programme and the Dutch Ministry of Economic Affairs, The Hague,
Netherlands.
23. Mazzarol, T. (2014) Growing and sustaining entrepreneurial ecosystems: The role
of regulation, infrastructure and financing, White Paper WP02-2014, Small Enterprise
Association of Australia and New Zealand (SEAANZ).
24. Miller, P., Bound, K. (2011) The Start-up Factories: The rise of accelerator programmes
to support new technology ventures. London: NESTA (SF/72)
25. Mitra, S. (2013) The Problems with Incubators, and How to Solve Them.
Harvard Business Review.
26. Neck, H. M., Meyer, D., Cohen, B., Corbett, A. C. (2004) An Entrepreneurial
System View of New Venture Creation. Journal of Small Business Management. 2004
42(2), pp. 190–208
27. Pretet, V. (2013). Entrepreneurial Ecosystems At The Digital Age 2013.
Innovathlon Strategy and Performance Consulting.
28. Randy Topp Business Improvement. (2015) Seebat Webforest. Retrieved from:http://rt-
bi.nl/social-responsibility/bioinspiration/seebat-webforest/
29. Saberi, S. (2014) “Speed Up” your startup with a€50.000 grant. StartupJuncture.
66
Retrieved from: http://startupjuncture.com/2014/11/14/speed-startup-e50-000-grant/
30. Saunders, M., & Lewis, P. (2012). Doing research in business & management: An
essential guide to planning your project. Pearson Education. ISBN 978-0-273-72641
31. Simons, H. (2009). Case Study Research in Practice. SAGE Publications Ltd.
London. 189 pp.
32. Speed Up! Europe. The official website of the Speed Up! Europe
program. http://www.speedupeurope.eu/
33. Stam, Erik. (2014). The Dutch Entrepreneurial Ecosystem. Birch research
Entrepreneurship & Innovation. Available at SSRN: http://ssrn.com/abstract=2473475 or
http://dx.doi.org/10.2139/ssrn.2473475
34. Suresh, J. & Ramraj, R. (2012) Entrepreneurial Ecosystem: Case Study on the
Influence of Environmental Factors on Entrepreneurial Success. Journal of Business
and Management. Vol 4, No.16, 2012 95
35. Valdez, J. (1988) The entrepreneurial ecosystem: toward a theory of new business
formation. Small Business Institute Director's Association.
36. Van de Ven, A. H. (1993) The Development of an Infrastructure for
Entrepreneurship. Journal of Business Venturing, 8(3), pp.211-230.
37. Wolinsky, H. (2010). B for bureaucracy. EMBO Reports, 11(9), 664–666.
doi:10.1038/embor.2010.121m
67
8. Appendix
Figure 1. Taxonomy of the Boulder Country Entrepreneurial System Components with
Frequencies of Founders Reporting. Adapted from “An Entrepreneurial System View of
New Venture Creation” by Neck, H. M., Meyer, D., Cohen, B., Corbett, A. C., 2004.
Journal of Small Business Management. 2004 42(2), pp. 190–208.
Figure 2. Domains of The Entrepreneurship Ecosystem. Adapted from “How to start an
entrepreneurial revolution” by Isenberg, D. J. (2010)., Harvard Business Review (88:6),
June 2010, pp. 40-50.
68
Figure 3. The Entrepreneurial Ecosystem Pillars. Adapted from “Entrepreneurial ecosystems
around the globe and early-stage company growth dynamics” by Drexler, M. (2014).
Cologny/Geneva: World Economic Forum.
Figure 4. The policy points of focus for entrepreneurial ecosystems. Adapted from
“Entrepreneurial Ecosystems And Growth Oriented Entrepreneurship” by Mason, C.,
Brown, Ross. (2014) Background paper prepared for the workshop organized by the
OECD LEED Programme and the Dutch Ministry of Economic Affairs, The Hague,
Netherlands.
Figure 5. The Business Model Canvas adapted from “Why the Lean Start-Up Changes
Everything” by Blank, S. (2013) Harvard Business Review. Retrieved from:
https://hbr.org/2013/05/why-the-lean-start-up-changes-everything
69
Figure 6. Key elements, outputs and outcomes of Entrepreneurial Ecosystem. Adapted from
“The Dutch Entrepreneurial Ecosystem” by Stam, Erik. (2014). Birch research
Entrepreneurship & Innovation. Available at SSRN: http://ssrn.com/abstract=2473475 or
http://dx.doi.org/10.2139/ssrn.2473475
Figure 7. Companies and Team leaders from 13 European countries. Adapted from Speed
“The official website of the Speed Up! Europe program” 2015.
http://www.speedupeurope.eu/
70
Outline of interview questions:
Topic: The attributes of successful entrepreneurial ecosystems, start-up communities. The
questions are related to the pillars of entrepreneurial ecosystems and their components with a
focus on The Netherlands. Case: SpeedUP! Europe programme – Amsterdam
Announcements that are very important for each interviewee:
• Your answers will remain confidential; your name will be presented anonymously in
the Master Thesis.
• The interview will be recorded in order to make a transcript of the talk. This is
important for analyzing the data.
• Please answer all questions as honestly as possible.
• Approximate time/interview: 30-60 minutes
General questions
1. Do you think The Netherlands is an optimal place for entrepreneurs creating start-ups? Do
you think it is a place for innovative ideas (compare The Netherlands to other countries in
Europe)?
2. Do you think the programme creates a good opportunity to get your idea started, or grow
further?
3. Question at the end of the interview: How do you see yourself (your team, your idea) at
the end of the programme?
Accessible Market
4. Do you think there is an accessible market for your ideas? Do you want to target local
markets, or rather go to foreign markets?
71
5. Are there any local conditions you would highlight that are different within Dutch
circumstances, comparing to other teams in Europe?
Human capital/Workforce
6. Are you connected to other entrepreneurs participating in the programme? How accessible
they are?
7. Does SpeedUP! Europe create opportunities for talents to be discovered, or it is a
“resource” of would-be entrepreneurs for creating start-ups?
8. How do you realize the connection with other entrepreneurs:
- In your team?
- Among the teams in Amsterdam?
- Teams in Europe? (The selected teams all over Europe who are participating in the
programme)
9. Do you think SpeedUP! Europe (and its hub created in Amsterdam) contributes to
creating a strong group of entrepreneurs?
Funding and Finance
10. Does SpeedUP! Europe programme create teams with ideas that can be attractive for
Venture Capitalists etc.? Does it increase the chance for them to get funding from VCs,
Business Angels, Seed Investors? Do these programs attract investors?
11. Does the programme educate you for fundraising? (How to approach VCs, Business
Angels Etc.)
Support services
12. Are you satisfied with the environment and infrastructure the hub creates for you? Does it
offer office-space for conveniently developing your ideas? Does it have an appropriate IT
and telecommunication systems? Is it always available for you?
72
13. Without the programme, would have you been able to get your idea or business started? In
what way did it help you, what was the most important thing (funding, mentoring, office
space, peer environment etc.)?
14. What kind of mentors do you have?
15. What is the role of the mentors?
16. What is the background (professional experience) of the mentors in general? Please give
me an example of a mentor supporting your development!
17. What is the role of the accelerators in this programme? Do you think what they offer is
(the opportunity of networking, the time, the funding) is sufficient in developing the
projects further?
18. Does SpeedUP! Europe create a good networking opportunity for you? What kind of
people have you met so far, who could be beneficial for you in the future?
19. Do you feel like that there is a community in the hub, or rather the selected teams are
competing with each other?
20. Using the FIWARE technology is a must. Does it help you in progressing your work, or
you could find a more optimal system for your implementation?
Government and regulatory framework
21. What is the role of the government in creating policies for start-ups in The Netherlands?
Can you give me some specific examples of what actions have they made in order to
stimulate (productive) entrepreneurship?
22. SpeedUP! Europe is part of an EU project. How does it differ/in what way is it unique
comparing to other initiatives of the European Union?
23. Would you change something in the policies to be more supportive for entrepreneurship?
If yes, what?
73
24. EU projects are known to be really bureaucratic. You need to meet a lot of standards, and
have plenty of administrative paperwork, and regular reporting. Does it create a good
system to your work, and make the process more transparent and accurate, or you find it
rather causing unwanted barriers and stress (for example, administrative paperwork takes
a lot of time, kills creativity and enthusiasm)?
Education and training, talent, network
25. Since you are part of the SpeedUP! Europe programme, did it organize any
networking/community building events for entrepreneurs?
26. According to information published on the web, it says that the programme organized
KickOff events, Bootcamps, Workshops, Crowdfunding Webinars, and a tour to San
Francisco, to the Lean Startup Conference? Some of these events are already passed, some
upcoming. Do these events create opportunity to connect with peer, influential and
inspiring professionals? How do you benefit from those?
Major universities as catalysts
27. Did you study entrepreneurship (broader: business) in The Netherlands? If yes, did it
support/inspire you to become an entrepreneur?
28. University of Amsterdam is a local partner of the SpeedUP! Europe programme. What
role does it play, as a “partner” in this specific case?
29. Does SpeedUP! Europe “recruit” people from local universities?
Cultural support
30. Does the programme decrease the chances of facing a failure and risk with your idea?
31. Do you have teammates that are not coming from The Netherlands? If yes, where is/are
he/she/they coming from? Do you consider it beneficial to have multicultural teams? If
yes, in what way?
32. Do you think SpeedUP! Europe creates a positive image of entrepreneurship?