Make Next offers helping hand to start-ups with scale-up potential
Where are the new Dutch hardware heroes?
The Netherlands is home to some of the world’s most innovative hardware companies. But where is the next generation? At the launch of Make Next platform in March, a meeting place of startups with scale-up potential and established hardware companies, ASML’s CEO Peter Wennink reflected on today’s emerging hardware companies and what might help their chances of scale-up success in the Netherlands.
Top notch technical universities, renowned research institutions, global hardware companies, and plenty of capital. Welcome to the Netherlands. But, Peter Wennink mused at the start of his speech: “Where are our new global hardware heroes?” The emerging companies that spring to mind are all based in the United States: Oculus, GoPro, Tesla. Even a successful Dutch start-up like 3D printing company Shapeways chose to move its headquarters from Eindhoven to New York City. Why is that?
If you’re thinking money is the problem, you’d be wrong, Wennink argued. Whether it’s Silicon Valley, New York or the Netherlands, investment funds have money available to invest. What’s difficult is deciding which of the many startups to invest in.
“We were a start-up within Philips: Fifty people in a temporary building making a crazy machine.”
In the U.S., venture capital (VC) investors often have more of their own expertise. An example is Andreessen Horowitz and its co-founder Marc Andreessen. Before his VC career, he co-founded Netscape, co-wrote the first web browser (Mosaic) and co-founded Opsware, which was acquired by HP in 2007 for $1.6 billion.
Technology expertise enables investors to make up their mind about a technology start-up. And even if they lack that technology know-how, they have a network that they can consult with, stretching from Silicon Valley to New York City.
Unfortunately, institutional investors in the Netherlands often lack both. They feel more comfortable investing in web or app startups, where investment levels are low and enough for market validation. They also put money into startups in the healthcare and pharma space, where investment levels are high, development takes a long time, but pay-offs are also high.
Hardware start-ups find themselves stuck in the middle.
At the launch of Make Next, Wennink dove into ASML’s history to illustrate the problem.
“When you look at ASML some 32 years ago, we were a start-up within Philips. Fifty people in a temporary building making a crazy machine,” Wennink said.
“But if we needed research done, we could call someone in the Philips labs. If we needed hardware expertise, we could call someone in the Philips factories. If we needed a supplier, we could call someone in the Philips supply chain. So the fifty people with their crazy machine, they actually got quite a bit of support.”
That bit of support lasted for ten years, as ASML found its way into the semiconductor lithography industry and matured its technology.
“We are grateful that there were people at Philips with a vision, that there was a support infrastructure that we could use,” Wennink said.
Philips also offered ASML something else. Credibility. With a major name in the electronics industry backing its earliest efforts, the little lithography company could get its foot in the door with potential customers. And crucially, investors trusted Philips’ stamp of approval and invested in ASML.
Flash forward to the Netherlands in 2016.
Start-up culture is thriving thanks to a series of great initiatives. StartupDelta aims to create a better ecosystem and encourages regional start-up hubs to work together. Hardware-specific incubators such as Yes!Delft and Brightmove help entrepreneurs develop their earliest product ideas. And accelerators like HighTechXL help turn these ideas into actual start-ups, further developing the idea and finding the capital needed to build a business.
But once a start-up matures into a scale-up, who can these emerging hardware companies call for technical advice or coaching? Who can vet their technology so that investors are willing to take the risk? Who opens their network to them to learn, mature and get ready for global success?
This is where Make Next comes in.
“At its core, Make Next is simply a meeting place for established manufacturing companies and startups with scale-up potential,” Wennink said.
Make Next provides a future generation of hardware and manufacturing companies with a unique opportunity to gain access to the networks, knowledge and expertise of co-founders ASML, Huisman, Vanderlande and foundation Stichting Technology Rating. The platform aims to enhance everyone’s capabilities and create interesting cross connections.
By co-founding Make Next, ASML gives back to the community what it once had the privilege to receive: a helping hand from an established company.