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Four reasons to move your startup to Amsterdam (and 2 challenges)

On March 6th, several US companies visited Amsterdam. The visit was part of a small European tour (London, Dublin, Amsterdam, Berlin) called Disrupting Europe to present these disruptive companies to European prospects, and to show these companies where best to put their European offices. In one of the panel discussions these companies  and local speakers shared their reasons for considering Amsterdam. The discussion outcomes are summarized here.

Four main reasons for moving (part of) your company to Amsterdam

4. Technical infrastructure
cablesMany disruptive and innovative companies rely on big data and need a fast Internet connection to work well. The Amsterdam Internet exchange is one of the fastest hubs in the world. Since the transatlantic cables surface in Amsterdam, Amsterdam is a hub with high bandwidth and low latency. Putting your infrastructure here thus makes sense for data-heavy companies.

3. Closeness to markets
schipholAmsterdam is not in one of the large European markets (UK, France, Germany), but it is well-connected to all of these via Schiphol airport. Travel times are low to all these markets and most European headquarters, especially when you live in Amsterdam, The Hague or Utrecht.

2. Great place to live
bikes amsterdamSeveral people coming from the US or London remarked how nice it is to have a 20 minute bike ride to their work rather than a one hour commute. Amsterdam is also a safe city with a good facilities and friendly people. Finding your way around Amsterdam without speaking Dutch should not be a problem, as everyone speaks English. You get used to the weather.

1. Access to talent
pianoThe one thing that fast growing companies needed are talented employees. Amsterdam has a lot of talent: creative talent, internationally oriented people (who speak English and many other languages) and people with technical IT-skills. If you are well-funded and use English as the main language talent is easy to find through the regular channels. When you are cash-strapped, you probably need to search longer to find the right co-founder or first employee willing to share the risk with you. Meetups such as Pitch.rs , Hackers and Founders and the Appsterdam community can help you.

Two main challenges
1. Less Venture Capital
Raising funds in the Netherlands for an innovative startup is hard compared to raise funding in Silicon Valley. Mischa from Dutch startup Wercker has raised funding both in Amsterdam and Silicon Valley, so is in a good position to compare. “The US investors we talked are better at looking at the big picture. The European investors are more focused on short term gains”. Huddle founder Andy McLoughlin shared a similar view comparing UK to US. “The valuation of our company in the US was significantly higher than the valuations that European investors could offer”. There simply is a lack of enough Venture Capital firms. As Bas Langelaar from Vectrix noted, angel investors try to fill the gap, but have more limited funds. Note that this is true not just for The Netherlands, but throughout Europe.

2. Fragmented housing and hence community
One small annoyance of Dutch startups is the struggle to find sufficient affordable office space in Amsterdam. There is plenty of empty commercial office space, but it is fragmented and often temporary, forcing companies to move around. This also makes it harder for companies and people from the startup community to find each other and connect. Amsterdam is blessed with many initiatives and incubators (Rockstart accelerator, Startupbootcamp, VentureSpace, Boven de Balie, Pitch.rs, Rockstart answers, BounceSpace to name a few) but more connections are needed.

Combining the best of both worlds
werckerWercker itself was started in The Netherlands but is now also located in Silicon Vally. They have access to the US Venture Capital scene for capital and knowledge but do development work in Amsterdam so they can benefit from the talent pool here. They are actually looking for more  developers to join their team, so if you are a developer, contact them and help them have a global impact.

Photo credits: Creative commons via Compfight

About the authorSieuwert van Otterloo (twitter: @entreprenl) helps companies through advice. He gives software related advice via the Software Improvement Group, innovation advice via Inbys and manages his own venture fund Otterloo Ventures. He writes for Startupjuncture and Frankwatching.   

Sieuwert van Otterloo
Sieuwert van Otterloo is IT expert by day and startup enthusiast by night. IT expert via Softwarezaken | innovation expert via Node1 | editor and cofounder of StartupJuncture | member of StartupDelta | startup investor. Reach out to Sieuwert via otterloo @ gmail .com
  1. fabian says:

    Very good summary in my opinion, thanks Sieuwert!

  2. […] what I have seen, London is hot. With Amsterdam and Berlin it ‘s one the hottest startup scenes in Europe. I was only in London for 2 days so […]

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