More commonly known for its canals and liberal attitude to intoxicants, Amsterdam is a city taking the start-up world by storm. Last year it was named as the fourth most competitive city in the world for business by PWC. Eleanor Ross finds out what it has to offer British SMEs.
Crowned the second-best city in Europe for starting a digital business after London, Amsterdam is fast evolving into a future leader of the entrepreneurial world. More than seven per cent of Dutch adults own or plan to own their own start-up and the capital was recently identified as one of the continent’s best places to start a company. But what makes the city so attractive to start-ups, and why should British businesses consider giving the city a go?
Take it’s location for starters. Amsterdam is one of the best-connected cities in Europe. It’s airport, Schiphol, is considered a hub, with multiple flights flying to the US and Asia every hour. It’s linked to London, Berlin, Paris, and Frankfurt by train, bus, and road,and, thanks to a superlative education system, has some of the best levels of non-native spoken English across Europe.
The education system doesn’t just excel at English – Dutch pupils’ scores consistently rank among the world’s highest in maths and science subjects too. This means there’s a literate, curious, and intelligent pool of potential workers who are switched on and keen to explore new avenues of business. Thanks to its location and workforce, it’s also managed to attract a plethora of multinational companies, such as Nike, Cisco Systems and Ikea.
Perhaps due in part to the country’s favourable tax treatment for foreign-owned companies, both Uber and Netflix recently decided to establish their headquarters in the Dutch capital, while smaller start-ups have thrived under the leadership of former European Commissioner Neelie Kroes, whose moniker “internet Tsar of Europe” is well-deserved. This isn’t a recent phenomenon. Companies including Booking.com and Tom Tom set themselves up in the Netherlands in the early 1990s and the scene has grown steadily.
James Winfield, founder of energy price comparison site Swuto, is one entrepreneur who took advantage of Amsterdam’s favourable SME climate. He chose to go to Amsterdam partly because the Dutch energy scene is very progressive and also because Dutch business accelerator RockStart is based there. “It sounds corny, but it’s the one city where I’ve managed to feel truly alive. Also, big Dutch corporations are tuned into the start-up scene, which makes life much easier for a young company like Swuto.”
Best of all perhaps, for those hoping to start up their ventures, is that there’s money in the coffers of those living and working in the city. According to news website Start-up Juncture, during the first quarter of 2015 some 33 Dutch companies raised more than $88 million, an enormous amount for a single three-month period. Not only that, but there are reported to be around 15 venture capital firms in the city, widening the pool of potential investment opportunities. Prime Ventures, Van den Ende & Deitmers Venture Capital Partners, and henQ lead the way when it comes to venture capital and that’s not even taking into consideration the $167 million of EU funds that the country is permitted to distribute among start-ups.
Rockstart is one of the largest incubators in the city and it has gained worldwide recognition for helping to encourage small businesses like Swuto to develop and grow. For Winfield, the organisation proved life-changing. “For one, I was given a lot of money (£75,000), networking opportunities, and contacts. There is an element of ‘name-dropping’ – mentioning Rockstart in Amsterdam carries a lot of weight. More generally, being part of an accelerator is a bit like a badge of honour; it makes you seem more credible and not just like a bunch of young lads doing a project.”
Although the start-up scene in Amsterdam appears to be booming, the main problem now is keeping the companies in Europe. Business leaders here talk of businesses being poached by the US as soon as they have raised enough capital, which is concerning. The same leaders are starting to talk about how business can be retained, something that is becoming a major priority for this start-up star.