Can you tell us something about the three investment companies you co-founded?
Peak Capital we started with some board members of the IPAN founded in 1998. That was an association of Internet professionals who exchanged knowledge and experience. We thought: why don’t we invest in young companies together? That started small with their own money. The second fund was already becoming a bit more professional and also allowed outside investors to participate. We continued to professionalize the third fund. Johan van Mil became Peak’s full-time managing partner. I myself remained involved on the sidelines as a founding partner, including arranging funding. Currently, recruitment for the fifth fund is already underway.
The Future Food Fund provides seed capital to food and agricultural technology companies. A kind of Peak Capital, but for the agrifood-tech sector. Again, I am involved as a founding partner, again at a distance from the day-to-day operations.
Together with Reinout Lempers, I started Vivid Ventures in 2019. This is not a traditional fund, but more of an investment company. We target experienced founder teams, with no specific focus. The team must be experienced, although we can get in at an early stage of the start-up. We would like to be free in the form of investment and in choosing an industry. That wouldn’t fit if you set up a fund. Here, we raise funding on a deal-by-deal basis from outsiders who are knowledgeable about the specific start-up.
Why am I investing? Above all, I want to do fun things with fun people. It gives a lot of energy to work with enthusiastic entrepreneurs and share the mistakes I’ve made and the things that did go right. If a start-up is fundable, we step in and bring in industry experts.
An entrepreneur must dare to think big; it starts with ambition.
What are key success factors of a start-up?
First of all, the entrepreneur must dare to think big. It starts with ambition. Often we see entrepreneurs thinking too small and doing business too cautiously. We ask about the entrepreneur’s view of the market. Does he or she really want to make a difference? The entrepreneur must have the ambition to establish the very best team. In that, you should not make concessions. We often see a founder hire mediocre staff, possibly out of fear of not being the smartest later. Or from the idea that the top talent will be too expensive. That’s all small thinking.
As an entrepreneur, you need to be able to think a step beyond today. In core positions, you need to find staff for tomorrow. If you look ahead to what you as a company will need in terms of employees in the future (from targeted growth, internationalization plans, organizational complexity), you will hire different people than if you look purely at what you need today. I love the quote by Sheryl Sandberg (then COO of Meta), and also ask this question of founders, “What would you do if you weren’t afraid?”
What would you do if you weren't afraid?
People too often make choices out of fear; they think in “yes buts.”
To get on a healthy growth path as a start-up, you need traction. Then you really build something, investors get interested and you can retain top talent.
Furthermore, unit economics must be sound. These are the revenues and expenses related to an individual product or customer. These statistics must be correct in the basics or it will be nothing.
Another success factor is determined by the problem the start-up solves. That should be big enough. There must be a clear need to have in the market, not a nice to have. Take the young company Drystack. It has developed a patented system that allows you to build without cement in construction, a circular façade construction system. Circular construction with minimalCO2 emissions is the future. In construction, masons are dying out. At the same time, there is the challenge of building hundreds of thousands of homes. And it has to be sustainable and circular, too. You can talk about a big problem that Drystack solves for the industry. This factor is all right with this start-up.
An interesting start-up is paracetamol for a perceived pain.
A start-up should be the paracetamol for a perceived pain. That pain must be so great that from that pain relief alone, customers are willing to pull out the wallet.
After three to five years, most start-ups are gone, what is the reason?
Often, in retrospect, the product-market combination turns out to be wrong. Timing is also important (after the fact). In many cases, the need (the perceived pain) was not great enough. In addition, things tend to go wrong in execution.
The successful rollout of an ambitious growth plan requires the right team. And then you come back to hiring top talent. Things often don’t go well there.
For a founder, it is important to manage investor expectations well. A great saying is: underpromise and overdeliver. Keep expectations realistic and make sure you exceed them every time. By the way, every investor understands that the growth path is different from what is portrayed in the investment memorandum. It is a certainty that everything turns out differently than expected. By definition, that is the only constant. An entrepreneur should not want to stick to the plan at all costs. Often in the first few years you have to make a pivot, a fundamental change in, for example, the revenue model, the way you make money. We saw that in the early days of Catawiki (an early investment from Peak) and now again, for example, with Drystack. The key is to keep your investors on board in turbulent times and be transparent about the necessary changes in the business model.
It is a certainty that things will turn out differently than expected. That is the only constant.
Do you have any tips for starters?
Go go go, just do it. Early on, gather good people around you who are two steps ahead of you. Create energy and enthusiasm around you. And get an advisor on board who is knowledgeable about the market and in a position of importance to your business. You have absolutely no shame in asking for help. You’ll see, people are always willing to help you.’
Success factors of start-ups that emerge
- Team composition
- Ambition and dedication
- Market demand and timing
- Unit economics