The impact of start-ups on the labour market
Some context to begin with: what are start-ups?
Start-ups are generally young companies – not in terms of the age of the founders or how long the company has existed – rather, companies that temporarily have an innovative business model and want to grow scalably. A ‘starter’ is a young company which has been operational for less than 5 years.
And what are scale-ups?
I am often asked what the difference is between a start-up and a scale-up. Suppose that you have the money to recruit a full-time employee. A start-up puts that money into a product developer and the scale-up puts it into a sales person. Basically, in a start-up, the priority is still working out the development of a product or the market proposition.
And what is the so-called ‘start-up culture’?
“Start up or die” is a slogan I use a lot. What I mean is: a company which doesn’t act like a start-up will die out. This is already the norm in the US. They throw out all the politics, transparency is sacred, and hierarchical lines are blurred. It will be the same here in the future. Make a note: “Start-up or die”.
Can you give examples of that old versus new way of thinking over here?
One example of the change that has not yet been fully grasped here in Belgium is that of the Carrefour cashiers. They were standing in front of the cameras – with all due respect by the way – with tears in their eyes, because they will lose their jobs. No-one seems to have an answer to the situation. But I’m thinking: surely everyone saw this coming?
Another example: people take to the streets because they don’t want to do a heavy job until the end of their career. Who will be the one to tell these people that their job will no longer exist in 10 or 20 years’ time?
Is it a question of two different worlds?
Yes. On the one hand, you have the old image of ‘corporate thinking’ and, on the other, you have the new image of the ‘autonomous thinker’. I can see a very unsettling gap opening up between these two worlds.
The principle that the world of work involves studying for 5 years and then living off your diploma for the rest of your life is a very odd way to look at things. Millennials and the Generation Z have a completely different outlook in that respect.
What is the start-up culture in Flanders?
As an amateur photographer, I like to use the terms ‘frog’s eye angle’ and ‘bird’s eye angle’ to explain this. The frog sees the world from a safe hiding place, and everything seems bigger looking up. That is how a lot of people in Flanders see start-ups. While birds swiftly fly over in complete freedom and see everything smaller from their vantage point. So you can see the start-up landscape in Flanders from these two perspectives.
Don’t get me wrong. A great deal has improved, and there is now a certain degree of maturity. Start-ups have become popular, and names such as Louis Jonckheere (Showpad – Ed.) and Davy Kestens (Sparkcentral – Ed.) appeal to young people. Investors are also beginning to warm to start-ups. So, yes, things are moving forward.
Let’s go back to the bird’s eye angle. The eagles of this world, such as Alibaba or Amazon, fly over Flanders and don’t even notice these start-ups. The podium of the start-up superpowers is made up of the United States, China and India. Europe doesn’t even have a place.
If we look at Europe itself, then London, Paris and Berlin take the medals. Amsterdam is in fourth place. No Belgian city comes anywhere near. Players such as Alibaba head straight to Paris, London or Berlin. They assume that they will come across the strongest start-ups from Belgium in one of these metropolises.
How can Flanders put itself better on the map?
In Belgium, as well as in Flanders, the efforts are too dispersed. Work should be done to develop a single ecosystem for start-ups. For outsiders, our start-up landscape is difficult to fathom. We don’t make priorities, and try a bit of everything: fintech, healthtech, biotech, HR-tech, and so on.
Another observation, especially in Ghent, is that start-ups are primarily ‘white, male and middle class’. Antwerp is already a little more coloured and female. I suspect Brussels does even better.
As an illustration: before the Brexit negotiations, around 5,000 IT specialists left France every year to go and work in London!
Can we learn any lessons from our Northern neighbours?
The Netherlands has been much more successful in clearly positioning their start-up landscape. It is a country surrounded by water, and they have built their entire ‘branding’ around this feature.
In the Amsterdam and Rotterdam start-up scene, hiring someone who does not speak a word of Dutch is no problem at all. The important thing is that they’ve got the right skills. In the Rotterdam start-up district, shop assistants address you in English. In other words, shops recruit staff who speak the language of the start-up scene. That’s not something you would see happening so quickly here in Flanders.
Are there other examples from abroad?
The most successful cities for start-ups have an active “hospitality policy”. Why do talented people go to Berlin? For the atmosphere and nostalgia. London is associated with design. Perhaps Flanders can be the health scene of the future? We have excellent scientists in this area who help cure and prevent diseases. But that means making choices and a clear positioning…
The most successful start-ups go to where the market is. How does this translate to the employees in start-ups?
My motto is: ‘Buy good brains or goodbye brains’. As a start-up, you need to attract the best people from your sector. If you can’t, you will need to relocate.
Here in Flanders, you see a lot of twenty-somethings in start-ups, who often don’t even have a driving licence. For these start-ups, it is clearly essential to establish themselves in urban areas, close to transport connections – where it is still affordable.
You notice these days that students prefer to do an internship at a start-up rather than at a large corporation.
Can you give an example?
Take Louis Jonckheere from Showpad, for instance. He speaks on a human level to his employees, and to everyone in fact – via social media – in a direct way. Conversations about private life and work are mingled together. Then when I see that a lot of founders of large companies in Belgium are not even on LinkedIn yet, I find that outrageous. How do you expect people to come and work for you?
If you look at our most successful start-ups, such as Colibra, Showpad and SparkCentral, you see that they have all opened branches abroad. And yet the technical staff and product developers in Belgium are more loyal, cheaper and at least as good as their American counterparts. What’s more, they cost 100,000 dollars a year instead of 300,000…
You mentioned a start-up hype?
Yes, there is a certain overheating. These days, an idea can sometimes become a business too quickly. As such, it’s very easy to find cash. There is nothing wrong with that in principle. The start-up bubble will burst by itself.
Why on earth would talented people want to work for start-ups?
“Meaning”. I want to work where I can make a difference. The culture is also appealing: things move quickly, there is no politics, no ‘meetingitis’ and no control and command. So the efficiency and impact you can achieve yourself is usually higher than is the case in corporate companies.
Is there still hope for start-ups in Belgium?
Don’t get me wrong. My message was meant positively, but we need to keep up with the rest of the world. We are no longer better than the rest. Our past success factors, including language skills and working more efficiently, are no longer a competitive advantage, and shouldn’t be either.
We need to embrace change. That means attracting the best brains, opening up our borders and making clear priorities, because you can’t excel in everything. Think of innovations in the fields of biotech, music festivals, foodpairing or fashion, for instance.
So it is mainly a question of mentality?
Belgians are risk averse – and this is certainly the case for government procurement agencies, large companies and SMEs. Belgians buy spreadsheets without risks: you need to be the best, the cheapest and the most well-known, all at the same time. The Dutch want to see and discover a lot more in the way of innovative products. The Dutch will buy from you precisely because you’ve got something new and original. Belgians won’t buy from you precisely because you’re trying to sell something completely new and original. In my view, the fact that we are so risk-averse is a major risk in itself.
Eric Kenis, Consultant, Coach & Author in (growth) entrepreneurship
Prior to writing the 'Hoek af' series of books, Kenis was active in the start-up landscape for 10 years. He set up the starters project Bryo on behalf of Voka. Over the last 2 years, Kenis has been creating entrepreneurial concepts and implementing business projects for clients including ING Belgium, Vlerick Business School, UGent and Unizo.
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