S01E01 - Building Startup Communities with Lucien Burm

FH - Okay, well, today on the podcast, we've got we've got Lucian Burm. And Lucian, welcome to the show.

LB - Hi, Florian. Thanks.

FH - And we meet each other like once a week for the past weeks in a program called Spirit of Enterprise.

LB - Yes, we do. We know each other quite a bit now.

FH - And normally I'm your guest at that show, and this time you're a guest on my show. So the roles are a little bit reversed.

LB - Yeah, I like it a lot. I'm quite curious.

FH - Okay, so when we talk about Spirit of Enterprise, it sounds a bit like a slogan. It's a good slogan. What's behind it?

LB - That's a good question. And you like it, right. So first question for me is what do you like about that phrase?

FH - Well, it drives energy, I feel. It's about enterprise. It's enterprising. And then there's also, like, spirit that you need to have the spirit to actually do this. And that requires enthusiasm and like I said, energy.

LB - Yeah. There are a few things that sort of fall in together in this name. And usually when you pop up a name, nobody really thinks about why you did it. Right? So for the people who actually made up the name, they always think a lot of it. And it might not necessarily be that much contributing to the success or something, but the people working for it can feel really comfortable, like sort of I'm subscribing to what it means. And in this case, as you know, this is a startup program, or at least it's a program to form teams that become startups. So it's all in the team phase. And that's also quite personal, though you have skills, and in the world of startups, it's often I wouldn't say required, but requested by investors, like, do you have a technical developer or a CTO or things like that? So they always look for hard skills, things like that. So is the team complete like that we're looking for? Do you sort of combine as a team really well in terms of traits and in your energy and your ambition and things like that, and words like ambition and energy and these kind of trades, they translate easily to spirit. Right? Spirit of Enterprise in this case was sort of extra special because it came out of the University of Nairobi and they have something called, like a Lifetime Achievement award, something like that, which is also called Spirit of Enterprise. So the ones that made like a true effort in the Netherlands or worldwide even, and comes from Nairodian University can get that reward award. Um, and I think actually there's also wrote a book about it. And that book is sort of full of lessons of entrepreneurship. So it's truly a program in the spirit of enterprising. But we also take the word spirit very seriously, not in a religious kind of way, but basically in terms of drive, energy, ambition. The spirit should be into something or else you just shouldn't do it at all.

FH - Right? And the whole goal is to create teams of well spirited people that can together create great enterprises. Right? If I use those words and credit.

LB - Summary yeah, well translated and it's not even just teams but the best teams so we always use words like things like elite teams or things like that and there's really not a really good word for it or we haven't found it yet. But of course, the things that we are tackling, there's always a problem. You're tackling. And the problem that we tackle is that there are too many startup teams just starting up and failing. Not because they are not attacking a good problem or have a great idea. They fail because they don't work well together. And that's just a shame. So the failure rate is going down, which is true over the years but not fast enough. There's so much methodology already, for example, to get from A to B in started life in terms of product and market and things like that. But there's not that much in terms of forming your team and the right team and get off to a good start, making sure that you don't make, for example, too many wrong decisions or the right decisions, too late or no decision at all. Things like that. So it's mostly combined like having the same goals and ambitions and engine drive but also being able to work together really well. So you make less mistakes because you will make mistakes which is fine but the less you make, the more successful you probably will be.

FH - Right? And so far you've talked about basically that you're doing a service to the teams like you're working. You've got this program set up for the teams and for the founders, the startup founders. I know that similar programs, they always come from the venture point of the venture capitalist and I'm not going to name names here, but we all know startup programs or venture studios. In the end of the day what the person that they work for is the venture capitalist, the people who make money off the startup investments. How do you see that?

LB - Yeah, that is quite different. We of course know those programs. We don't consider ourselves a venture studio but we do consider ourselves venture developers and preferably creating the environment where they emerge from basically organically. So there's a lot of stuff in our program that we try not to decide for you but people just decide themselves. So usually in any French studio you might just be encouraged, let me put it that way, to form a team with this adapt person or you bring in an idea and they help you find more co founders and then provide the finance to continue. But usually venture studios from a venture capital perspective it's great stuff because they succeed more often and it's a higher return for the investors. But that's not so true for the founders because they usually have not much left in terms of shares in the company as they would have if they would have started on their own. So we try to minimize that as much as possible. Our tactic and I'm sort of turning into the situation with the fund. Right, the investment fund now. Floridian but our intention is, of course, to not just have a few teams popping up from our gardens, to put it that way, but just many, many. Like, it's a numbers game to us. And it's not a numbers game in terms of being very personal because, as you experienced, everything we do is quite about the personal stuff first, but it's not mutually exclusive to also have like a business model that's based on the numbers game. So we intend to let emerge hundreds of startups from our programs and take as little share as we can from it to make sure that there's many things going on there. It's not philanthropical or something, it just means making sure that the entrepreneur stays in charge of everything they do. We want to create autonomous teams and we don't believe that most venture studios or these kind of programs also the bigger names that you probably have in your mind, they do build teams, they do not let teams emerge that are quite autonomous on their own. So we just want to mimic everything that would normally happen in a very good way. How people meet and they may become acquainted and they might get interested to work together and they come up with things they like and they start working on something and it's all tested and they failed a few times and they get through some rough times and they emerge as a startup. That's stuff that might sometimes take years from people but we want to have that situation. So we are just sort of a bystander something that flows through us, through our program but then emerges as a team. So it is an accelerator. In the end we just try to accelerate that process that would normally take place in the normal world but now it's a bit more structured and a lot faster and it's also a big experiment. We just don't know yet how well that will perform. But that's our angle, right?

FH - And I've also used the word I'm going to say that again, I've also heard you use the word founder friendly. Can you explain what you mean with that?

LB - Because a lot of investors use the word founder friendly. No, we are very founder friendly but what we mean by that is that we truly do not mingle in your affairs. Whatever you would like to do in the end we can advise you and we advise many, many startups but in the end you're the entrepreneur and it would be really stupid if we expect you to always follow our advice or any advice for that matter. Because you wouldn't be a great entrepreneur, right? So that will be rare if that would happen. And weird, maybe. So founder friendly means that in all things that have sort of applied, because you have to work together, you're a founder, you might become a team, you're part of a program for a short while. You serve more than just your own plan, right? You serve two plans or two business models or whatever. So we just want to make that impact as low as possible. When I was, let's say, the person that set up the first programs in the Netherlands for accelerators like Rockstar, I did the first two years there. And before that we did found the Institute, which was a very school like program. Rockstar was more like what we're sort of doing right now. But then the teams were already there. And what we noticed is the more autonomous and founder friendly, you let people move around and move forward. It might take a few detours, but there's more result coming from it, more true sort of deep growth that they try to accomplish or else they just fail. So we just want to mingle as little as we can and just if you have a question for us or things that we always try to help. So that's just the soft side to it. The hard side to it is that we also think that in terms of equity, shares, investment, that kind of stuff, we feel in the Netherlands, for example, even in the world, the valuations are not just that, right? For real international growth, you're always sort of one step behind if you come from the Netherlands, if you try to get an international round. So of course the international big VCs, they know how to cope with that. But we just want to make a stance and show how it can be done. So that's why founder friendly also means the lowest equity and the highest valuation for the first round that we like to offer.

FH - When you talk about founder friendly, I always think about, okay, if this all founder friendly on one hand and there must be like BC or Friendly, are they opposites? I mean, I can imagine that being founder friendly must eventually be also be beneficial to investors.

LB - How?

FH - How do you see that?

LB - Well, I think exactly that. So the more founder friendly, I think you're in the wrong business if you don't do that right. Because if you're not founder friendly, especially in a very early stage, you're steering too much and you're taking out the autonomy and the capacity of that founding team, they're going to lean way more on the investor than on you. You sometimes see this usually with angel investments happening and some early stage VCs, it's of course very hard for an investor to see people make mistakes that they shouldn't make. But you can advise. And once they make it, they make it. You just want to see if they recuperate, if they change course. They learn from stuff that's all important and usually it's fine, right. We just see some really weird unfriendly investments, like notoriously funds from universities in the Netherlands or Europe for that matter. They can be very unfriendly in terms of equity. So you already lose like a big part of the company just getting started, so it's almost impossible to get more investment on board later on. So you're basically killing the company at the start. That's not fairly found offensive. We've seen a lot of weird things, or there's a lot of milestone investment saying like this, yes, we're going to give you a million. Well, that's quite high for the Netherlands, but we'll give you €300,000. But we do it in three tranches. So the first one is one hundred K. And then once you get to this milestone, you get the second one in other countries and are particularly referencing to the US. Of course, that will be killing for an F four, if you see, because no one else will do that. But here in Netherlands, it's still there. I think this was researched a year or two years ago. There was still a large part doing this to founders, really, which is weird because it's difficult to pivot. For example, you're still on a course you need to make those milestones to get more funding. So you stick to something that you might not need to stick to. Secondly, you can be very successful and your valuation will completely differ from that milestone evaluation. So I would say just take the hundred. That's my advice usually to founders, just take the hundred if they want to and say, well, I don't take the rest, and we take the valuation now, and we just see how well we done. And this is where you also get sort of the feeling of a true entrepreneur who goes like, well, I'll take my chances, I'll show you. Right? It's that kind of energy, what you look for. But it's kind of weird. So these, these kind of things happen, or particularly in Venture Studios, it, it to me, it feels like you're almost on the payroll there because they take so much equity and you also get paid for that equity. So, yeah, that's not the role psychologically that you want to be into if you're an entrepreneur. Maybe it's our romantic background or just sort of nostalgia that says, like, you want to have it rough. And just the two of you in a very or three of you in a very bad neighborhood with a very bad place, but working on tremendously great stuff, getting helped by some people who just pass by and they believe in you. And they go like, well, this is something really cool, and this is where you get lift off. So this happened to me, this happened to others. It always happens if you have something great and you start talking about it and you have a great team, people just feel the combination. But nowadays it's also well, I would say it has more become a methodology. There's a lot of data involved nowadays, so I think a lot of VCs look at it a bit differently now. But still I think in a program you will still meet some investors that are more late stage and you would, you would expect a different attitude from them. But it's not right. They still have that same startup attitude. If you come across with this high drive and high energy attacking something very interesting in a very good way, you always have the attention. I know in the program we sort of keep hammering on page decks and stuff like that. And yes, they are important, but that stuff is way more important than what's in the deck. Because if that's already there and the deck is not really good or something, they will start asking questions. They will dive deeper to figure out what needs to be done to get you on the right track. I think that's still there.

FH - Yeah, let founders be founders. That's what you sense they get out of you.

LB - So yeah, let people deploy, you know, themselves.

FH - That that's yeah, exactly, exactly. Because if you, if you start guiding or smothering them that too much, you don't reach the full potential that's in it and that's what the program is designed to do, I guess. Can you talk a little bit like in practical, concrete terms? Like what is the program? You do have to start a program, so what is it, what is the plan?

LB - So the program has essentially two parts. So the first six weeks is about learning about yourself and potential team members because you're already at the end of the first six weeks. I think I told last Friday already that it's not really about all the startup exercises that are in there. Also it's a bit like set up to fail a bit constantly and it's just to see how people work under high pressure and also if things go a bit wrong or they're too late or things like that. So what happens and it's not for us to learn, like what happens, for all the people to learn about each other what happens. So you can make a bit more conscious decisions on whom to work with next. So that's the goal of the first six weeks, to be able to choose team members that you might want to take a go with on the real startup life, which is basically kicking off in the second six weeks. So the second six weeks is your good old fashioned startup building. But we're quite experienced with that. We don't think that nowadays it should not take twelve weeks, but about six weeks and of course it doesn't really stop after six weeks you will still continue. But that's sort of the structured part of our working together right.

FH - During our conversations in the past, I think six weeks, the first time we met was in October last year. I've always sensed a sort of I don't like the word, but I'm going to use it anyway, sort of sense of frustration with the current startup ecosystem in the Netherlands. Do you recognize that the word first?

LB - No, it is a frustration and I think there are more of us, I'm not the only one. So actually the people in the startup ecosystem, they are all frustrated and of course we recognize all the good stuff. Right.

FH - Where does this frustration come from? You?

LB - Well, just because you see it can be done a lot better and you can see somewhere else why it moves a lot faster. So we don't have to be like Israel or the US or things like that. But the speed of execution is so much higher and so much faster and the opportunity is always also much greater. So in the Netherlands you need to work against a bit of the cultural stuff. Like you have to act normal, don't sort of stand out too much. That's one thing. Also the people you need to work with sometimes in terms of investors. We have a famous word in Dutch, but it would translate to the chicken butcher because people who had like a butchering company or something in the past suddenly has enough money to invest in startups and then starts to get involved how that should be done. And of course that's a huge exaggeration, but there are many people, even nowadays, if you would ask people who exited a company maybe ten years ago or even five years ago, something, and they would try to help you. Now they are already way out of the ways of working. How it's been done now, right. It changed so quickly and it goes so much faster. So the frustration is always that we still have to lean very much on all kinds of angel investing. Not so professional. There's a whole range. There are a few very professional startup angels in the Netherlands who are great to work with, but they are former founders and they have international companies, they have been everywhere, so they really know what they're doing. These are gold, right, if you have them on the team. But the rest takes a lot of convincing to sort of get you through the French family and fools round. Right. That's usually the first one and we don't have that many true venture capital firms that can do precede there and not that much that would say, interesting concept here's. The money doesn't work like that. I think we had a discussion on Friday or the week before, like my colleague remembers the name, but the Dutch guy went to us, had been on one founder team of a startup, then wanted to start something next. It was just him and he didn't have an ID yet and he got a million, that kind of stuff. It's not that that should happen. I'm not agreeing with that. But I'm just to stress that this would never happen in the Netherlands. That should tell you a lot. But on the other hand, I've seen angels who would just invest in somebody because they believe in them. And that's sort of the friends and family of fools route. But that's sort of frustrating. It's not that professional. It's not the same kind of valuations even as you would have internationally. It's not enough people working in this field. Yet in the Netherlands, the community is not very tight. There's all kinds of stuff going on. I know you have been traveling around to different startup hubs in the world. I think you went to Boulder, right? Or was it Austin?

FH - Boulder. Seattle was in Spain a few months ago.

LB - Spain. I'm not sure what you thought about the energy in Boulder, for example.

FH - Especially the energy in Seattle was Seattle. It's so much different than I mean, this is difference between the US. And the Netherlands, of course, in terms of how people relate to each other. Yeah. But I also get the sense, and this is something that I want to put out to you, is that the folks there, they're happy to work 100 hours a week. I'm not sure if you're going to do that ever in the Netherlands. And how does that affect the ecosystem? Because you can talk about external factors and being close knit. But if that's not happening, I agree with you.

LB - For founders, that's sort of mandatory if you need to be able to do so, or else it won't work. The first problem you get if you get Dutch people working for you I'm not saying this is the reason, but if you look in startup teams like the the first few team members that are hired, these are usually not people from the Netherlands. I think it's above 50%, might be even 60 or 70% in a certain stage of people on the payroll of startups are not from the Netherlands. And there's a very good reason for that. Not because they want to work 100 hours a week. It's usually because these are people who already took a step. They left everything behind to go somewhere else. So that little thing is already quite important that people are willing to do something like that to get what they want. Right? So these people will go a long way in my companies, for example, that people just start to work there. They came from Argentina, Turkey, us. Everywhere, russia even. And they not only worked really hard, they learned a lot of things. They were only doing this, nothing else. Right. And their friends were their colleagues. It became so tight. You almost have to be aware that you're not making it too tight nowadays. They said you need to have a life too. Right? But yeah, I'm not sure if this is entirely true. In a very early stage of a startup, once you get a lot bigger, it becomes different. And if you're in the Netherlands, you're hiring people here, you get all this attitude of work life balance, and you might agree or disagree with that, but certainly for startups, it might prove a problem. So this is why incentives are also very important and these are not very well arranged in the Netherlands. But if you have something to work on and you don't earn that much at a startup, but you do have shares, right? And you can work for it, you can become something. And you know that if I'm succeeding here and I work for a few years really hard, I can have enough money to start my own company after this. This is what you need. This is what we call the flywheel of an ecosystem. And this is not happening that much in the Netherlands. And that is basically also based in what you're saying, or what I think you're saying is that people just don't want to work too hard on this side of the pond. Yeah.

FH - So the conclusion here is it's fine to start a company startup in the Netherlands just don't do it for Dutch people.

LB - Yeah, well, I would say not all those people are like that. I think you're not like that. I'm not like that. So there is a bunch of us who's not like that. Right. Definitely.

FH - Work life balance is a thing in the Netherlands and also like how your family and friends respond to you. If you have that kind of behavior where you're so obsessive with your work that they don't understand anymore what you're doing and they don't support you in that.

LB - It's true. That happens. People always think you work too hard, but I can barely call it work, right. This is what usually people say, we're kind of obsessed with their startup. It's just what they do, right? It's what they are. Even so it becomes an identity. This is true, but there are people in the Netherlands, so you just have to find them. So hence the program. We want to find those people and it's quite hard. This is not a question, but I'm just going to answer it anyway. How do you find people who want to participate in the program? This has been one of the most interesting parts that we try to research. Like, okay, we don't have to succeed like 100% in the first program, right. But we need to figure out how to find the right people, which is quite hard. We don't want to do selection. We don't want to do assessment based access. You would get assessments, but after you join, it should be free to anyone, but it should appeal to certain people. So the first time what we did, and you were part of a few, is we did some pre events like we did in October and just to see who would well, you could sort of test, if you like, something like this. And we did already sort of a startup exercise, we put some pressure on it. We changed some stuff during the exercise to see how people would respond to it and I think quite a few people stuck but also a lot of people didn't come back. They went on to do something else, which is fine. So we don't have a method yet how to find them. We do know of other programs that are more like a fence studio. They really do selection, right? They really want to figure out they go through hundreds and hundreds and hundreds of people to select a few. It's like an application process. We really didn't want to do that. We want to sort of attract the right people and it's still very hard. We haven't solved it, I guess, but there are in the program quite a few people, quite a good few people there. I just love the fact that some people said that, yeah, I didn't sleep because I had to finish the prototype. Right? Yeah, I didn't ask that. But you did it right? So that's pretty cool. I like that kind of stuff. It's not normal anymore.

FH - The quest is clear. You're on a quest to make the startup ecosystem in the Netherlands better. And then one of the questions that I guess investors always ask why are you the best or only person who can do this in the Netherlands to do this?

LB - The answer is, of course I'm not because I think a lot more people should do this, like us. I don't mind a bit of competition and there are competitors, not just in the Netherlands. There are a few that we know of already that are really similar to us internationally. Also because we're a bit more focused on the impact side of startups. There are a few out there, not that many. But I think what we will see in the future is that the accelerator landscape is moving from sort of somewhat later stage still early stage like the accelerator. Already a team has some traction and they sort of get into a program and they get launched with sort of the epitome of Y Combinator as the mother of all accelerators which is basically nowadays used for international startups to launch in the US. So you already have a lot of traction and you can get in on that kind of stuff. But then of course you have the incubators before that and they're not often very programmatic, but they could be more. And then there's us. And by lack of a better word, we have called it reactors instead of an incubator or an accelerator because we're trying to fuse people together under a certain pressure and see what happens to see if the heat gets very high in this reactor. At one point material starts to change and energy starts to. Come up and just come into existence. And this is what you need. It's sort of a very symbolic way of talking about it, but it's about bringing a few people together. And suddenly between those people, energy starts to emerge and it starts to drive those people. And this is when, you know, when you have something good going on, they can't quit. They have to do it, and they can't do it without each other. They feel it right. And once that's happening, that's great. And there should be more of that. So I'm definitely not the only one who could do this. There are a few more. I think it's just a matter of time that there will be more of these kind of programs. And we also intended to just to open it up. We don't mind. So we're probably going to open source this once we sort of concluded what worked and didn't work in the first program.

FH - And could you just as a sense of conclusion, introduce your team? Because not just you, it's also Yoan and Jasper.

LB - Yeah. So Johan Scrap and Jasper for bake. I think Johan and I know each other for quite a long time. And Johan is Mr. Internet Addiction since 94, basically like me as well. But I would say I'm not an entrepreneur since 94, but probably since 84, I think I started with my first football team and then football club, really. And then I went on to build a cartoon studio. Then I got into high school and had different interests. Then I had.

FH - That order as well.

LB - But I did become like the typical the DJ on the parties of the school, things like that. So I was always organizing the events and things like that. I still like that. And then the web came along and I started my own company just to build web pages when nobody did in the Netherlands. Not that many at least, but there was a lot of first not really good, but a lot of first things that we did in the Netherlands. So I like that to be the first at something. So we did the first accelerator in the Netherlands. I did the first web building. I think we even had the first advertising platform for websites in the Netherlands. That's all way, way back. These were just experiments. You will call them MVPs nowadays. So that's what we did. And Johan also comes from that area. He always worked in Internet. And they also ran, which is great, they ran a show, maybe a bit like this for ten years. And I think every founder that turned into something has been on that show and sometimes multiple times. So you could check progress over the years. Also when they failed, they came back and they explained and he's coming still in the program. Steven Fanwell. We call him Stephen Fanwell because he went to the US. But they went to Techstars in New York. And they got part of it, they stayed there, they built a company there. In the end it failed for a few reasons and he did come back to explain it on the show in a very open fashion and that's fantastic. So Johan knows a lot of people and a lot of investors not only in the Netherlands but also outside and has some really in depth information because these were not talks for five minutes. That was like very extensive talks and I've been often to those talks by the way, it was great. And Joseph also sort of focused around these programs. He's basically from a bank and his bank was a banker and he was one of the first to sponsor every startup program in the Netherlands because he was on the venturing side and innovation side of that bank. So he did all the famous ones in the Netherlands like startup boot Camp and Rockstar and Antler and all the first ones. He sort of put some money there. He set up the first incubators in Amsterdam with money from the bank and what is now TQ or the Next Web where we have our next event that's been set up first by him. So we all have been part very much of the startup ecosystem for many, many years now, had companies or were involved with companies or Jasper was a client of my company as well and we did a lot about the program. So when I had companies and Yosef has his job and Johan was doing other jobs in the internet industry, we're always working together on programs. So I think that's where our love for programs came from and I think this is what we are really good at, we think and how we can make things better for people because in the end the question is of course making the startup ecosystem better. But that is kind of abstract for us. I think the energy that we actually get is when something starts to work with people. For example, you met the founder Julia last Friday, did his little story. He went through a lot of shit and actually came out doing well and we've been with every stage with him and that makes me emotional and it makes me energetic, right? It makes me do this again and again and again and I've done it for free also for many, many other founders in the past and I just want to continue doing this until I can. But I think that's the main driver to be honest.

FH - Right. And how long have the three of you, Johan and Jasper been working together in sub fort or doing projects together?

LB - Yeah, so this particular project is now for over a year and Johan already together in a project for four years now. Five years? Yeah, four or five years about that. And of course I worked with Jasper already before that, but in different roles in the ecosystem and that is probably since, well, maybe ten years already now. So we know all each other, we have history. Yeah, not that closely worked together for all those years, but I think we know each other for about ten to twelve years of the program.

FH - And just as a wrap up, where are you now with the program Spirit of Enterprise and as a call to action, the people listening, how could people help?

LB - Yeah, that is a great question. They always say that if they have to think about an answer right, it's a great question. I know this answer right away, so of course I want people to join the program. We're going to do this every half year at least and probably a lot more. So we want to people join the program. If you can't do that and just saying it's not just only for becoming a startup in some way, it's also if you want to start working in the startup world, you want to work at startups, for example, it's also a great program. So we want everybody to join in if you can. So you go to Spirit of Enterprise Pintanell and then you sign up and you're in. It's that easy. That's what we want to do. But also everyone who likes to help out with building these kind of programs. So the program itself, if you can contribute or if you have any thoughts on how to do this better, that's very much appreciated. So we're really looking for people to help us grow.

FH - Okay. Looking for investors.

LB - Yeah, but only for the fund. Right. So not for the startup directly.

FH - Right, okay. I think it gives a brilliant wrap up of what Spirit of Enterprise is what you're doing. Especially also the entity and the enthusiasm that I would say the spirit that you put into the program itself.

LB - Maybe they're the name should have come from I don't know.

FH - Yeah, it's the Spirit of Lucian, but the Spirit of Enterprise, the spirit of entrepreneurial Lucian. Johan and Jasper, I want to thank you very much for the opportunity to do this interview.

LB - Yeah. Florian thank you for having me. It was great. Thanks a lot.