Dutchman Sake Bosch founded leading venture capital and growth equity firm Prime Ventures back in 1999. Its Dutch and British offices manage approximately half a billion euro in committed capital and invest in technology related, European, high growth companies. Sake Bosch is an investor who has been around: “To be honest, after 22 years of venture capital experience I can say it’s a fairly cyclical business. You have ups and downs in the markets. When I started in the 1990s there was scarcity of capital while in 2000 there was an abundance. We had twenty competitors when we started Prime Ventures of whom we are the only one that survived.”
Startups’ ability to disrupt
Sake has seen some changes in his time as investor: “Twenty years ago it was all about the invention, the product development layer. Whereas now, innovation is more about disruptive business models. Technology itself has become a commodity in the sectors we invest in. With the tooling that is available in software a small team can make beautiful things in a short time. To give you an example: all telecom businesses could have developed WhatsApp – from a technical innovation point of view. But they were not able to make a disruptive business out of it. It was a startup that did. Startups are better positioned to leverage their independent thinking to successful companies.” Startups are agile, free to be creative. “It also has to do with culture and leadership: the CEO of a startup is often focused on product development. Look at Steve Jobs, Elon Musk, but also Jitse Groen from Takeaway.com; he cares so much for every detail of the product that it has become the best in the market.”
A successful entrepreneur is adaptive
Asked to share his opinion on supposedly ‘stingy’ Dutch investors Sake answers: “Entrepreneurs who have difficulty hiring educated team members will complain about the availability of talent. Entrepreneurs who are not able to raise capital will complain about the investment climate. In our view a successful entrepreneur adjusts to the circumstances and organizes these things for himself. Nowadays there is a lot of early stage capital available in the Dutch market. With one euro a startup can do much more than five years ago: you don’t need much capital to get started. If you want to raise 10 million or more you need to keep in mind that it is an international market. Prime Ventures itself invests in Europe, and I observe similar trends in the various countries. We are interested in disruptive technologies, the country of origin is irrelevant.”
Expectations for Amsterdam Capital Week?
“I think it’s great that both the city of Amsterdam and its startups will be put on the international map and gain attention. The Netherlands has great entrepreneurial success stories like Booking.com, Takeaway.com, Dealerdirect. These are all interesting companies, in the case of the latter two with high potential. Amsterdam Capital Week will get the message across that if you want to be a successful entrepreneur you need to start here.” Sake believes the week will be a great networking opportunity but he is even more enthusiastic about attendees experiencing the appeal of the city. “With current technology people can start a company anywhere, it’s not necessary to be in silicon valley. So where do you base your company? There where it is fun to live. That is the big plus for Amsterdam: it is a fantastically pleasant city with lots of young people.
Customer is king
Numerous times Sake stresses the importance of a customer-minded approach. Also when it comes to raising capital. “If you prove that you can raise money with customers, rather than with investors, you have a great value proposition. Always focus on your customer: review your statistics of growth and find out where your growth comes from. Every day you must monitor whether you are better than yesterday; if you are not address that immediately. Have quick feedback loops.” Perhaps the Dutch do have an advantage: “we are very good at customer applications. Customer interaction is a strength of Amsterdam: I see it in gaming, in software applications. Thanks to our no-nonsense culture we build well-structured things that are logical and feel right to the customer.”
Sometimes it works, sometimes it doesn’t
A Prime Ventures investment that Sake is especially enthusiastic about is Takeaway.com, the food delivery service that lets you choose, order and pay take-away food online. “We approached the entrepreneur. The scalability of the model was interesting, and indeed, the business is growing extremely fast.” Was there an investment that did not work? “Thuisapotheek (an online pharmacy service) did not work out because we had underestimated the resistance of the existing parties. Pharmacists did not appreciate us disrupting their market. You can compare it to local taxi drivers who want to ban Uber from the market. It was a shame; Thuisapotheek had 70.000 customers.” And if there is a Dutch startup Sake wishes he had invested in it would be Catawiki. “Their growth and potential are very compelling.”
The founder is key
“I am interested in the people side of investing. The most important criterion for Prime Ventures is the founder. We like to work with interesting, optimistic people and ask ourselves three questions:
- Does the entrepreneur have the ambition and energy to build a big company?
- Is the entrepreneur intelligent and pragmatic?
- Do we trust the man or woman with our money?
And of course we expect the entrepreneur to have a strong focus on the product.” Sake believes many more young people, both men and women, should consider life as an entrepreneur instead of aiming for the perceived safety of big corporates. “I hope my daughter will become a successful entrepreneur. As an entrepreneur you can truly make a difference in the big themes in society.”