Dutch tech hub is facilitating the next Google

Amsterdam is already a leading tech hub, and is now offering support for companies in their second phase of development

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Tech hub TQ recently opened in Amsterdam, hosting tech startups in their second stage.

Amsterdam is one of Europe’s fastest-growing hubs for IT startups, and TQ is supporting some of them through the hardest stage of any startup.

There are numerous startup hubs across Europe, and a hub that concentrates on helping companies through the second part of their journey, which is very different from the first stage, is a valuable addition to a place like Amsterdam.

The city is made for a bustling tech community, said Robert Gaal, managing director of TQ.

“Amsterdam offers startups a lot of talent, from the local universities, as well as international talent. The city has a high standard of living and there is good transportation, inside the city and also to the rest of Europe,” said Gaal.

TQ resident Homerun was previously based in Rotterdam, but staff found they had to spend time in Amsterdam because people from abroad usually travel there first. “As a sounding board, we always travelled to Amsterdam. That’s why we wanted to move there,” said Willem Van Roosmalen, co-founder of Homerun, one of the TQ residents.

According to a Dutch government and private sector initiative called StartupAmsterdam, there are more than 800 startups located in the Dutch capital.

Read more about startups in Amsterdam

But what Amsterdam, and also the Netherlands, was lacking was an initiative that helped startups in the second stage of their growth. “That’s the stage we call the inculaters. The stage after founding your company, when you start selling your product and have your first group of customers. Our concept facilitates this second stage,” said Gaal.

“We are now in the stage of finding how our product fits in the market. It’s about figuring out how to make your business sustainable,” said Stefan Fountain, founder of PR.co, another TQ resident.

“We’re trying to find exactly which market to target, which channels are most effective and which message is right. Once you have a repeatable model, you’re ready to scale. That’s the hardest thing to do when you have a startup.”

Reach exponential growth

In this second stage, startups have to look beyond their product. “It’s the stage where you grow to more than 50 employees. It means your company has to recruit people and needs HR procedures. It’s also the stage where you are trying to get funding,” said Gaal.

“Funding your first stage is different to and less difficult than funding the second, because you also need far more capital and you’re probably getting it from investors. Your financial prognosis needs to be correct and you must have a good marketing strategy.”

The startup founders have to learn about other disciplines, and they have to learn it fast. “The technology sector is changing rapidly, and if you don't launch your product, someone else will, and you lose ground on winning your target audience,” said Gaal.

TQ was officially opened in October 2016. The tech hub – an initiative of The Next Web – is located in the former ABN Amro building Muntstaete.

Money is made by renting office space to startups and organising events that are open to everyone. A startup has to meet three conditions to be a resident of TQ – it has be international oriented, has to have the potential to grow exponentially, and the team of the startup has to be diverse. A startup doesn’t have to be a tech startup.

“But if you ask for a startup which has the possibility to grow substantially, most of the time it will be a tech startup,” said Gaal.

Enormous wealth and knowledge

To help these startups, TQ works with several partners, including Google, Booking.com, KPMG and ABN Amro. Their motives for participating in TQ differ, but all want to improve the ecosystem for startups so they can take advantage of it.

“They can offer services to the startups, which will grow or recruit the talent the startups attract. Small companies are a good source of creative and innovative talent. But it can also be that the partner wants to give something back to the city,” said Gaal.

“All the residents together have an enormous wealth of knowledge and experience. There is no other place where you can find this. At the coffee machine, you ask residents from other startups how they solved the problem you have. And we have an online community where people of the same disciplines share best practices,” he said.

Homerun's Van Roosmalen said: “Our CTO [chief technology officer] has a monthly meeting with other CTOs to share experiences.”

“We can focus on our company. Coffee, lunch, cleaning and an office space, it’s all taking care of. We are growing fast. If we now want to rent an office, we have to rent one for about 20 people, but there are only seven of us. We don’t have to spend money on a big office. When we need a bigger office, we can move.”

Gaal is happy with the response TQ has had so far. “The small early successes of TQ helps find employees for our residents,” he said “In three months, we have residents who started in a room for eight that have now moved to a room of 15. We have new residents like Stripe, a payments provider in the US, which is organising events in TQ.”

TQ hopes it will be fully booked by the first quarter in 2017.

Points of improvement

But there are points of improvement. The tech hub will be hosting more events next year, and TQ is working on an investment fund. “We notice that the investing climate in the Netherlands is not very good for the stage we have startups in. We are looking to change that with our own funding,” said Van Roosmalen.

“The Netherlands is lacking what I call ‘smart money’. This is the money of investors with experience in launching a mobile app or a gaming or fintech company. Investors who can give advice beyond just a board meeting.”

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Funny. How can you start the next google when you're only at 30% of your capacity? 

What this article leaves out is that Robert Gaal has reportedly turned away many local startups, and has practically outpriced himself out of the market.

It's a struggling ecosystem with only a very few number of wins, so this article is somewhat misleading in its title. Google had a garage and an idea. TQ is like a garage, if you had to pay €2000 to use it, and have no chance of meeting anyone (because it's empty). And it had intelligent people running it. Almost a year in, and TQ is still looking to fill out their initial roster of staff.

Truth be told, Amsterdam is an amazing startup community and has a bustling tech scene that rivals international cities. But TQ is far from anything significant in the system. For now at least. 

Their only saving grace is the very loose affiliation with Google for Entrepreneurs (which any well-run organization can get), and TNW - their marketing and PR engine. A powerhouse, mind you, but TNW is not TQ.

So, please do come to Amsterdam. Visit the flower market. Get a little high. And have a coffee at TQ. But there are cheaper and more engaging hubs to work from than there. Spend your money on growing your business, not paying rent.

After all, that's why Google started in the garage.