All in all, 2021 has been a great year for European unicorn creation with some media speaking of a ‘European unicorn boom’. To date, more than 70 European private companies have boasted a $1 billion plus valuation, bringing the total number of unicorns produced since 1990 to 296, slightly more than China.

But there’s still a long way to go. While Europe may be pulling ahead of China in terms of fresh unicorns, the US managed to mint 184 in the first eight months of 2021, with more on the way in the months after.

What’s one thing that could hold Europe back from competing in the unicorn market? A lack of ambition.

A recent report by Techleal, a Dutch organization that strives to build a “thriving Dutch startup ecosystem,” and the University of Utrecht, found a startling paradox. Using data collected by the Global Entrepreneurship Monitor, they concluded that while the country has a high number of entrepreneurs, few have ambitions to grow their business on a larger scale.

The researchers behind the report posit:

“Ambition is something the country is going to have to attack if the goal is to grow more unicorns,” said Joe Wilson, a US native and CEO of Dutch company Risenu. He’s now one of Techleal’s entrepreneurs in residence, providing mentoring for the organization’s Rise program cohorts.

Being from a country where ambitious (and at times cocky) founder personalities are the norm, Wilson provides a unique perspective on the very different Dutch ecosystem. He shares a story a Dutch scaleup founder shared with him that illustrates the problem with ambition in The Netherlands.

This isn’t a purely Dutch problem either. His Danish counterpart Nicolaj Christensen, Director of Digital Operations at Digital Hub Denmark, agrees, “that mindset shift is something that we’ve been struggling with.”

So how can we solve this success complex? The three gentlemen have some ideas.

Mentorship from previously successful startup founders

Maturity of the ecosystem is something all three national startup cheerleaders mention as part of the cause for the recent success of Europe. What this meant was unclear to me, until Christensen put it in very simple terms.

This reflects some pretty decent academic research , which concludes that knowledge imparted by investors, advisors, other entrepreneurs, and, in particular, corporate venture funds, are more important than the money they bring into the company due to the operational value they add. And the inspiration, of course.

Wilson sees this in the Dutch ecosystem as well:

He continues, “the key is that we recognize and shine the light on those people who are willing to take a chance, who are willing to show their ambition. We should celebrate ambition rather than criticizing it.”

Good education

This feeling can be even stronger when a founder’s personal proximity to a fellow founder who reached unicorn status is smaller – like if they went to the same university.

Both Wilson and Christensen share the view that a strong academic foundation breeds more innovative companies with huge potential.

“I think there’s a real specialty in the Netherlands around deeptech, like biotech. And your love of academia does create pockets of super cool developments. There’s plenty of cool shit being created in this country. I think the ideation to MVP is probably per capita one of the best in the world,” Wilson gushes, while also raising two big issues.

The first is that connecting the initial innovation to a successful business model doesn’t always happen as smoothly as it could. And second, there are just not enough students enrolling in areas with high unicorn-potential.

As Christensen puts it:

Take a global perspective as soon as possible

Christensen thinks that part of the success of Denmark’s ecosystem is thanks to ambitious startups being forced to quickly take a more global outlook. “You need to go wherever it suits your business model,” he says. “That could be the Nordics, UK, or Germany, depending on your market. We could still be better at that. We can still go abroad much, much earlier.”

When it comes to The Netherlands, Wilson says, “I really believe that the Dutch have this great ability to start interesting things, but for some reason they don’t try to explode their business across the planet.”

Red tape might be one reason startups don’t more readily expand abroad. Multiple startup organizations mention that startups sometimes skip over expansion in Europe to move to the US, simply because complying with regulations in 27 different countries is way more of a hassle.

While this might sound like a nightmare, Wilson actually sees this as an opportunity.

“So I mentioned ChannelEngine, they wanted to run a European business first. There are different rules and languages in each country, and they just went out and mastered those. Then, when they wanted to expand to South America, the US, and Australia, they already had structures in place to learn and adapt to different cultures, regulations, and languages.”

But you don’t have to go so far away to make it big, he adds. “I do think there is a growing number of companies that believe you can make a unicorn in Europe, and you don’t have to go to the US. We’ve seen Polish companies who created a unicorn just in the domestic market.”

This is what I imagine the EU is aiming for with the newly announced Startup Nations Standard , a set of practices to create a “growth friendly environment,” which includes a bunch of things from this article as well. But also some points we have not touched on, like equity.

Stocks for everyone!

Both the German and Danish startup reps wouldn’t touch this policy detail on the record, but in most European countries it’s basically bad news to give your employees stock. Options or actual stock are treated as possessions by tax authorities, even though the valuation of the stock is completely virtual and the ‘possession’ is totally illiquid. Which in turn might limit the ambitions of both startup founders, and early employees who could be the driving force for more ambitious outlooks.

Wilson would go on the record saying that this awkward equity taxation, “reverts the compensation systems in the company to being about the salary as opposed to about the shared vision and contribution goal. So you don’t get to promote your belief system quite as strongly as when employees directly benefit from increased valuations.”

Although it does seem some countries, like The Netherlands, are taking a closer look at the current tax policy, it could still be a long time before European unicorns actually mint a bunch of new millionaires – who can then go on and invest their money and knowledge into new startups, creating a flywheel effect.

The Startup Nation Standard does seem like a well thought out document that addresses many of the issues reflected in this article, if adopted by enough European countries.

And maybe, considering Europe’s unicorn growth rate, we’re doing somewhat great already? Ugh, I’m so Dutch I can’t even say it without the question mark.

Scaling API-driven development can be difficult — here’s how to nail it

Developers today think in Application Programming Interfaces, or APIs. Looking at APIs first helps you concentrate on the problem that you are looking to solve in an application, or as part of a wider service. With communication between components in an application all taking place via APIs, this approach makes it easier to adopt microservices designs and make use of multi-cloud.

However, API-driven development (ADD) is not as easy as it sounds over time. Concentrating on APIs first can make it easier to build and maintain an application, but it’s not possible to ignore the infrastructure side completely. If you want to scale up your service over time, thinking about areas like data will be essential.

So how can you make the most of ADD and consider infrastructure together? And is thinking about this from a non-functional perspective the most helpful approach?

ADDing up your approach

The best approach around ADD is to look at your approach to APIs and infrastructure at the beginning. While focusing on APIs first can help make it easier and faster to update your application over time, it does not solve the problems that can exist around infrastructure.

Instead, it’s worth spending some time to consider how your APIs will interact with any back-end infrastructure service APIs, and how those services will meet any requirements for service levels. While an API in front of a database or a storage service can help you simplify the process for building a service, you do need to think about how that back-end will perform in the future.

Typically, many application components will handle some form of request around data. It may be creating an order, processing a change or providing some data back based on a request; all of these actions rely on either taking existing data from a database, or creating new data that is then inserted into an existing database. Making this simple to process as part of an API call makes it easy to grow the number of requests that can be processed.

However, that infrastructure is not as interchangeable as it may seem. Not all databases are created equal, and the same is true of public cloud service offerings too. It’s therefore worth spending time to understand how your options perform around issues like scale or availability. While the API to handle data may be the same regardless of the database you choose, different databases will perform differently and handle data in different ways.

While an API can mask the complexity of managing a database for you, that doesn’t mean that the database will go away. Instead, it’s worth spending some time on how you can make the most of this via your APIs.

New application designs call for new approaches to data

The move to ADD and microservices makes it easier to think about scale for an application. Need more horsepower to support more customer requests? Adding container nodes to handle an increasing volume of API calls, so this can support more demand. However, this is not the only potential bottleneck for performance.

For applications that are distributed — as in they are made up of multiple different components, each of which can be made up of clusters of nodes carrying out tasks — there are new approaches being developed that can make management easier over time. For example, the Kubernetes container orchestration tool makes it much easier to automate the process of creating more containers and shut them down when they are no longer needed. However, these approaches don’t deal with the issue of data.

Running a distributed database environment involves understanding how data is spread across multiple locations, and the partition tolerance, consistency and availability requirements that go into that setup. Using a distributed database alongside a fully distributed application allows you to keep your data close to your application, ensuring that latency doesn’t affect performance. Services like Apache Cassandra are specifically built for handling distributed data, making it easier to scale.

Similarly, using an API to access that database environment can mask some of the complexities that go into running that distributed environment. Even so, scaling up distributed database environments so that it can meet the needs of your application is a challenge. Understanding and planning for this in advance can make it easier to scale up your service overall.

If you do find that your existing database infrastructure is becoming a bottleneck for overall performance, then you can look at how to manage a migration behind the API. A shift from a relational database to a non-relational one, or a move from one NoSQL database to another, can require additional time and resources to be completed. However, the API can be quickly pointed from one service to another, limiting the impact on the rest of the team.

ADD and data together

Looking at your infrastructure may seem antithetical to ADD. After all, going into detail on cloud services or databases upfront can appear to be less important than looking at how to build and run the APIs that make up an application. However, issues caused by inadequate scalability or availability can quickly affect applications and they are not simple problems to solve with APIs alone.

Looking at your long-term requirements and architecture decisions upfront can therefore help you solve some issues early. By thinking about where your approaches to infrastructure and APIs overlap, you can make the best of both.

Partech raises $100M to back startups supporting new post-coronavirus reality

French venture capital firm Partech has raised a $100 million Seed fund to invest in post-COVID19 trends in health, work, commerce, finance, mobility, and computing .

Partech, which has in the past backed UK data startup Privitar and French fintech company October, will be scouting the European , US, and Asian ecosystems.

“While 3 billion people are confined at home , digitalization is bound to dramatically accelerate across sectors and ‘remote’ is emerging as a new standard ,” reads the announcement post .

“This redefines how people live, work and consume, while businesses have to massively switch online and reinvent themselves. Startups closing Seed rounds at the moment are ideally positioned to seize the opportunities lying ahead in the new ‘normal’ world, while incumbents are dealing with old infrastructure and massive cost cutting plans,” it adds.

The new investment vehicle , known as the Partech Entrepreneur III Fund, has already been deployed into eight new investments with two more set to close.

Funds are raising but coronavirus is affecting deals

Today’s news comes after several other well-known investment firms announced the closure of sizeable funds targeting European tech companies .

Index Ventures , arguably one of the most prominent VC funds , closed a $2 billion investment fund just weeks ago.

A press release at the time said $1.2 billion would go towards backing grown rounds with the remaining $800 million going towards supporting early stage startups.

Back in February — before the coronavirus pandemic began to disrupt business operations outside of China (where the virus is first thought to have originated) — Atomico closed a $820 million fund to back “mission-driven” European tech startups.

The firm, founded by Skype’s co-founder Niklas Zennstrom, will target Series A and beyond.

On paper, it looks like European tech companies are well served by venture capital investors and their willingness to spend even in the wake of the coronavirus pandemic but recent studies suggest otherwise.

Europe saw record VC spending in the first quarter of 2020, but the coronavirus pandemic is expected to have a significant impact on deals in the ecosystem. Investors may shift their focus to their existing portfolio in detriment of backing new companies whose founders they’re unable to meet in person.

The pandemic is also threatening the flow of US capital into European tech companies as investors on the other side of the Atlantic become more insular and look to support homegrown businesses .