Neelie Kroes presents her club of top European entrepreneurs: Zennström, Hed, Van Zanten,…21 Mar, 2013
Today, Vice President of the European Commission (aka “digital chief”) Neelie Kroes presented her ‘Leaders Club’ of web entrepreneurs at an informal gathering with some European journalists and tech bloggers. The goal is to create European entrepreneurial role models. (It’s a role that some are more willing to take on than others – Boris Van Zanten of The Next Web looked like he just walked in from a Vanity Fair photo shoot. Kaj Hed, chairman of Rovio on the other hand declined to be photographed – he did offer an Angry Birds stuffed head as a proxy though. The rest of the club was somewhere in between.)
Apart from those names, we met Reshma Sohoni of Seedcamp and Joanna Shields from Tech City, Niklas Zennström of Atomico (and, of course, Skype) and Zaryn Denzel of Tuenti. Daniel Ek (Spotify) and Lars Hinrichs (HackFwd, Xing) were announced but didn’t show up.
Kroes opened the session by saying that she assembled this club because she says she wants to show that entrepreneurship is “cool and sexy” – and that this goes for European entrepreneurship as much as for Silicon Valley.
Kroes: “I’m intrigued by this fairy tale that everything happens in Silicon Valley. And by the way, there’s no jealousy here. I have no thought of copying them. But my experience is that there is so much creativity and talent here, and we should be aware that a lot can happen in the EU. We shouldn’t think that nothing is happening here.”
Kroes is aware that half of her “crown jewels” (as she called them) have US passports. “Entrepreneurship is a global game today. But what one of them said just now is that we should “test our wings” in Europe. And we should give opportunities to those who have the courage and creativity to do that. This Leaders Club could be a great help for me and push us – the commission, to realise that we can do more to raise awareness about how exciting it can be to start your own business.”
It’s clear that the commission sees entrepreneurship and ICT as areas where there is a possibility for growth – one of the scarcest goods in today’s economic climate. She again stressed the big gap between the huge youth unemployment in some European countries (“up to 60 %”) and the 1 million ICT related jobs that won’t be filled by 2015.
Zaryn Denzel, who experiences first hand the ravaging effect of youth unemployment in Spain, echoed her concerns: “I think there’s a lot of work to be done – and it’s good that there’s one voice to speak of the values that are needed in Europe to create more companies. It’s something that we need to do.”
Q: Can (or should) the EU help create more European exits?
But is the problem really the lack of starting entrepreneurs, or the lack of oxygen to make sure they can succeed? VC’s in Europe like to complain about the absence of European possibilities to exit with a startup. And with no exit money creating young entrepreneurs with cash to invest, how can we get this ecosystem going? Can Europe play a role in providing a better exit market?
Kroes: “I’m not of the tribe to protect the EU and ringfence it. I believe in a global market. We shouldn’t underestimate what our entrepreneurs are doing. When I visit Silicon Valley and I ask European entrepreneurs whether they want to come back, usually one third says “no”, another third says “after I exit”, but another third says: “yes”.”
Niklas Zennström didn’t quite agree that we lack exit money, by the way. He said: “there are great opportunities – much better now than ten years ago. Back then, you had to do a full exit to get liquidity. Now there are growth funds, angel investors buying stock options for partial exits. The problem is: you need successful companies to do an exit.”
Joanna Shields of Tech City added that this idea that America is the holy grail for exits is not factually correct. She pointed to a recent BVCA study that (among others) busted this myth of the NASDAQ float: “You might get a higher spike when you IPO in the US initially. But over time, it doesn’t hold. If you’re a European company, it might turn out that not as many people follow your stock, and you can find yourself in an orphan situation where there’s no market for your shares.”
Here’s Kroes with the Angry Bird:
Zaryn Denzel thought it was more the mentality among young people in Spain, where he works. “Young people want to be functionarios – there is a sense of risk aversion. But I think we should realise that there is a shift in the economy that makes working for a big company not the safest thing anymore. The safest thing is to learn English and to get an education, participate in disruptive business models like web, mobile, cloud services.”
Q: Is Europe more risk averse, or is there just more risk?
A dissenting opinion came from Van Zanten here, who pointed out that Europeans are not necessarily be more risk averse – but that there is, really, a bigger risk in Europe. “I recently met an entrepreneur who said he had just winded down his business. I said: didn’t you do that three years ago? Yes, but it took him three years to handle all the administration.”
This doesn’t mean we have to yank the safety net from under our society, by the way, said Van Zanten and Zennström. “I’m sure we can find a middle ground between a laissez-faire approach and a protectionist system.” He did think there was room for improvement on the regulatory side. “I strongly believe that one pillar of economic growth will be the entrepreneurs – not the old businesses. And one of the challenges will be to change legislations in the old world that are geared towards big companies that employ big numbers of workers. In the startup world, people hire people, but they also make them partners, by giving them stock options, so that they become part of the success.”
Q: Is this initiative more than a publicity stunt?
Kroes, unsurprisingly, didn’t agree with this. “No. But if you see a problem, you start by getting it to people’s attention. I’m fighting for an EU economy that’s future oriented – we need farmers, but it’s probably not where the future employment will be. The future is ICT related. And job creation is mainly a thing of SME’s, and that’s where startups come in. So yes, I want more attention there, and I want to change the mindset. And it’s attractive for people to see what they can do – to have role models. That’s what their job is.”
(Asked if it wasn’t too much to ask from governments to make things “sexy”, Boris Van Zanten quipped: “That’s why we’re here.”)
Q: How will the entrepreneurs fill the “role model” job?
Zennström, who is perhaps the most cited as the example of the European entrepreneur who managed a multi-billion dollar exit with Skype, indicated that it would be wrong to see it as a job: “It’s not a programme. You become a role model, whether you like it or not.” He did add that he already spends a lot of time educating students about entrepreneurship, by talking in secundary schools all over Europe, Latin America and Asia. “I get inspired by those topics.”
Q: Who was your role model?
Zaryn Denzel started off by naming Mark Zuckerberg and Sean Parker, who he knew all the way back in 2005. (The excitement that followed this announcement proved that there is still some work ahead to make European entrepreneurs as cool as “Zuck” – as Denzel calls him – and Parker). “I realised they were just normal guys, doing interesting stuff. They drove me to do something on the internet.”
Seedcamp’s Reshma Sohoni’s ended up in banking before deciding that Silicon Valley was more exciting than Wall Street. Zennström couldn’t remember going into business because of a role model – and Van Zanten said that Zennström was his role model. “Skype was really inspiring, with their global focus. It made us say: why not aim at world domination?”
Joanna Shields said she was inspired by the company that her father started after being laid off. “It was do or die, there was a structural change in the economy and he lost his job. He had to start a business to succeed. And the big success he made of it, gave me and my brothers and sisters so much opportunity – and I also saw how big of an impact it can have on a community. It can be an engine of growth for an entire community.”
Even Kaj Hed became moderately talkative, saying he has been in business so long that he couldn’t remember any role models.I probably went into business because I’m no good as an employee, I’m too complex a person.”
He also added a reminder that in business there is no such thing as an overnight success: it takes patience, : “With Rovio, we started because we thought something was possible in mobile. But at that time, before the Apple Store, it was more a matter of luck if you bought a game from an operator, managed to download it and get your game to work.” Rovio launched 52 games before Angry Birds. “We kept investing, investing, investing. And when Apple came, we were in a good position to grow.”[photo: Leweb, Flickr]
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