When VCs invest in a company, they make sure to do their due diligence on the financial side of the business and they do so in a structured and a data-driven manner. But when it comes to evaluating the team itself, most of the decisions are based on gut feeling,
“I am a Rotterdammer,” says Lars Crama, founder of corporate innovation company Innovators Inc, partner at seed investor Arches Capital and the lead for Startup & Scale-Up Rotterdam, a public/private initiative to boost entrepreneurship and innovation in Rotterdam and beyond.
“I was born and raised in Rotterdam, and I’ve traveled and worked around the world. I’ve lived in Shanghai, Cape Town and London, only to return to my hometown. I think that this region has so much to offer.”
Lars believes that Rotterdam has the potential to become a truly global innovation hub. Of course, not without a challenge or two. For one, the city can always do better at communicating about the great things it has to offer – homegrown innovation, entrepreneurial minds, and diverse talent, just to name a few.
“Ask any CEO of a fast-growing company about their biggest challenge and you get the same answer: talent.”
“To me, human capital is all about people’s potential – their skills, experience and talents – and their ability to capitalize on it,” says Lars. In an effort to make the latter easier, Lars has been working together with the City of Rotterdam to position it as a hub of innovation, startup and scaleup activities, great talent and job opportunities.
Prioritizing human capital
The three main points that he and the team at the City of Rotterdam are focusing on with regard to talent are bridging the gap between tech and business education, attracting and developing talent, and making entrepreneurial and IT skills accessible to all. This is a three-fold ambition that brings multiple stakeholders together.
“When you look a hundred years back, it was the port that helped the city grow,” Lars says. “The biggest shift that we see today is the transition from old to new economy, where the things that got us really far in the past are now rapidly changing. The biggest challenge is not how to become the biggest port, but how to become the smartest one.”
Take education, for example: There’s no doubt that it is key to developing talent and preparing people for the future. With that in mind, there is a good amount of pressure on educational institutions to introduce students to the skills of the future. Disciplines are becoming increasingly intertwined and while technology will continue to play an important role, tech skills will have to go hand-in-hand with others, such as business and communication skills.
This is something that corporates, too, have started to realize. “The thing you see corporates do is move away from the old siloed organizational thinking. So far, we have always focused on creating specialists and but not it is becoming more and more important to have people that can make the connections,” Lars says.
It’ll thus be crucial for large organizations to open up and encourage their employees to work on their soft skills – anything from creativity and collaboration, to the ability to understand each other.
Even though the cultural nuance might be different from city to city, people have the natural urge to share ideas and connect.
If there is one person who knows all about the importance of connecting people and developing relationships, it will have to be Travis Sheridan. As President of the Venture Cafe Global Institute, Travis is working towards an ambitious goal: to open close to 50 Venture Cafe locations in just a few years. If you had to describe him in as few words as possible, you’d likely say that he is the type of person who builds communities and brings people from close and afar together to solve common challenges.
“People have the hunger to connect on a human level,” Travis says. “At the core, they all want to communicate, exchange ideas and share experiences.”
Connecting local communities on a global level
For many, human capital may sound as somewhat of a cryptic phrase at first, but, in fact, the really important word there is “human”. It is all about people. Regardless of their culture and the distance between them, people all share the desire to learn from and about each other.
Over the years, Travis has learned that “even though the cultural nuance might be different from city to city, people have the natural urge to share ideas and connect.”
As part of the Venture Cafe network, Travis knows the importance of having people connect in a digital as well as in an “analog environment”. The Thursday Gatherings at Venture Cafe bring people together in a physical, where they can meet, shake hands and talk face to face. It is the basis for all (potential) future collaborations. And it is also the basis for all digital activities that might result from it.
In other words, matchmaking works best both on- and offline.
To make that a bit more tangible, Venture Cafe Rotterdam has piloted the Talent Portal, an online platform that aims to connect companies with the right talent, and vice versa. It is there as an extension of the rather analog Thursday Gatherings, yet “it is not there to replace job boards,” Travis emphasizes. “We simply want to serve our community better.”
Speaking of matchmaking and bringing the right talent together, there is one person who strongly believes that is the way to go. That person is Eva de Mol, Managing Partner at CapitalT, an early-stage venture capital (VC) fund investing in software technology companies. More importantly, though, they invest in brilliant teams.
With a Ph.D. in Economics and plenty of experience studying entrepreneurial team dynamics, Eva has discovered the science behind putting together a great team – a team that can build a successful business. “When VCs invest in a company, they make sure to do their due diligence on the financial side of the business and they do so in a structured and a data-driven manner. But when it comes to evaluating the team itself, most of the decisions are based on gut feel,” she says.
Or so it used to be until Eva decided to develop a team assessment tool that helps investors – but also the entrepreneurs themselves – understand the team dynamics at hand. “With this tool, we can spot the challenges and opportunities in a team, as well as the skills that need to be added or further developed.”
There are three pillars that the tool looks at: (1) personality traits such as resilience, stress resistance and flexibility, (2) education, startup and other professional experience, and (3) team dynamics. While there is no single recipe for building a strong team, there certainly needs to be a good mix of the above three pillars.
“You need a good balance between hard skills, or the actual knowledge and experience team members have, and soft skills, or the passion and vision they have for the business.” No great company is built on just one or the other.
Seeing the power data can have on understanding and leveraging team dynamics, Eva decided to dig deeper into the entrepreneurial ecosystem. Together with Janneke Niessen, fellow CapitalT co-founder, Eva led another piece of research that aimed to improve the early-stage investment scene even further. They looked at the most common recipients of VC funding in the Netherlands and found out that just about 2% of all Dutch VC capital was going to female-founded or female co-founded companies. While that may not have come as a very big surprise, it was also indicative of the need for a solution.
It wasn’t long until #fundright came about, an initiative of Dutch VCs to make the ecosystem more diverse and inclusive. “We knew that for change to last, it needs to come from the ecosystem itself,” Eva says. #fundright aims to create an optimal ecosystem in the Netherlands by “achieving maximum inclusivity for all talent.”
At the end of the day, it is up to each and every one of us to bring their individuality out and find our how to best contribute to the communities they belong to. “Developing talent is largely up to us developing ourselves,” Lars says. “It is up to us to stay up to date on our own skills and agility. I think the biggest challenge is to figure out what our unique talents are and how we can capitalize on it.”Author: Mina Nacheva