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© institute for future insights. All rights reserved. Reproduction prohibited without written

permission.

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Partners:

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Content:

Foreword by the organizers

Foreword by Filip Tack, founder of Nomadesk, President of Carambla

List of participating start-ups

1. Executive summary

2. Respondent’s demographics

3. Current investments and future investment needs

4. Financial and headcount projections

5. The barometer: how confident are these startups to reach their objectives?

6. Conclusions

About the organizers

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Foreword by the organizers

Dear reader,

Since you acquired these findings of the first survey for Belgian web-entrepreneurs, you

probably have some stake in this market. Perhaps you are a potential investor looking for an

overview of the market in which you would like to invest. Perhaps you are a governmental

organization looking for ways to assess whether programs to stimulate entrepreneurship are

fruitful or not. Or maybe you are a startup yourself, looking for a mean to benchmark your

successes and future expectations with your peers.

Regardless of your purpose, this document should help you out. First we will investigate the

road the 61 participants to the survey have travelled so far. How quickly did they turn their

ideas into a business? Where did they get their idea from? How did they find the capital to

start their business? We will then investigate the future expectations of these startups. How

much additional investment do they need for their ambitions? How much do they expect to

grow in terms of turnover and headcount? Last but not least, we will look at how these

startups envision their future. How confident are they to reach their objectives? What are

they most afraid of? What do they need in order to meet their aspirations?

This is a starting point of what we hope will be a long journey. The value of this initiative will

undoubtedly increase over time, as more startups join this survey and as throughout the

years we will be able to add a time-dimension to this analysis as well: is the morale of the

startups increasing or declining? Do they find new investment sources? Are their projections

of future revenues and headcount changing –and, if so, why? These are all question we aim

to answer as we organize this survey on a yearly basis.

As we do this, we hope to maximize the value of this survey for the startup community, but

we will also track a small but exponentially growing part of the Belgian economy. As more

and more innovative youngsters have less and less barriers to chase their own dreams and

create their own startup, there is little doubt that this market will grow in importance and

strategic relevance in the near future. This survey aims to track this trend, and eventually

serve as a funnel through which this market can let its voice be heard to a broader audience.

It will be a journey, and we are extremely proud to be a part of it.

Frederic De Meyer Marnik D’Hoore

Founder Founder

i4fi Bloovi

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Foreword by Filip Tack, founder of

Nomadesk, President of Carambla

Full disclosure here: I am involved in two web-based companies, Nomadesk and Carambla (a

genuine web startup) and really no expert at statistics1, barometers, etc. Therefore, my

contribution here is very much opinionated and no analytical thesis at all. Hence those who

mind “profane” language – however subtle – should probably read no further .

Upon my first perusing through the results of this first edition of the Belgian Web Startups

Barometer, I was hit by an encouraging vibe. I was absolutely, positively surprised that the

editors had managed to gather responses from 61 Belgian web startups, all of which did not

even exist three years ago.

This means that currently 61 teams of “go-getters” are frantically working their butts off to

get something going and make a difference – in spite of the lingering economic turmoil, and

being in Belgium for that matter. Granted, there is no better time to spur entrepreneurship

and innovation than in an economic downturn, and maybe we are witnessing some of that

too, after all: “Why waste a good crisis?” Yet, I like to believe there is truly something

brewing, in witness thereof this “Gang of 61”.

Of course, kudos to all surveyed companies for raising over 5 million Euro in FFFF2 funding

(a.k.a. “Love Money”) already, an inspiring number which is likely skewed by the few lucky

bastards that were able to sell their ten-million-Euro-idea to an early-stage venture fund; this

being no small feat neither. With over 225 billion Euro parked on Belgian savings accounts

(March 2012), there is a vast untapped Love Money potential still – although it is highly

unlikely we see any of that being mobilized for this purpose anytime soon.

Upon my second reading though, I got slightly concerned, most notably with regard of the

funding. Though it is normal that companies kick-off undercapitalized (“barren soil nurtures

the strongest teams”, a business angel once told me – he’s right!), it does hamper their

credibility to do business with the big guys, and therefore to become successful and obtain

the level of funding to become a world-class player. It’s the classic Catch-223 logic. No

surprise that nearly all surveyed web startups expect to raise more money soon. But 25

million Euro, all together – really? That seems off by a couple of millions, on the low side. If

anything, this might very well be the amount needed for a single company to become

successful.

Why aren’t these Web Startups more ambitious? Is it really the lack of sufficient funding –

due to a scattered investor landscape more than anything else – that makes them reduce

their funding needs accordingly4? Startups should be cautioned that it requires the same

1 Lies, lies, damn lies and… statistics!

2 Founder – Friend – Fools –Family in no particular order.

3 http://en.wikipedia.org/wiki/Catch-22

4 Been there, done that, bought the t-shirt

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effort, and de-focus, to raise 100 thousand Euro as it requires to raise 5 million Euro.

Moreover, receiving early-stage funding is extremely uncertain. One can literally not afford

to bet the house on it, and therefore it should not be a startup’s primary focus.

Fortunately, there is a real certainty that money follows success. One caveat: in Europe such

success needs to be substantiated the old-fashioned way. So, here is a warm plea to the

Web Startups: Focus on what constitutes business success and what is required for an 18

months survival plan; the latter should not be venture capital – bootstrap!

Work extremely hard at substantiating your business model as soon as possible (beg, steal

and borrow – all proverbial), before even thinking about raising money (sweat equity and

FFFF excluded). When the time is right, be bullish and phase.

Clearly, all of the above is far easier “Foreworded” than done, especially for an

undercapitalized Web Startup that lacks all credibility to play in the major league. Therefore,

I need to extend my plea to the large corporations and governments too: give startups a

break and forego the Dun and Bradstreet5 reports for once. Simply do business; you never

know the startup ethos might inspire your company or department. Become a customer, or

better yet a strategic partner, that propels startup companies into major success.

European governments should think hard about putting Small Business Investment Company

(SBIC)6 programs in place, that require governments to include startup businesses in their

tenders, or give corporations tax breaks for doing business with the startups. My gut tells me

that it’s going to yield better results than setting up co-investment schemes with banks or

funds.

A final word to the editors: I hope that you can turn this Barometer into a Monitor that

regularly checks in with the “Gang of 61”, through good and bad times. I personally doubt

the relevance or value of a repeated survey with different subjects. Dare to take a “Guinea

pig” approach – no disrespect – and try to distill what constitutes success and failure in this

“Gang of 61”.

Thanks,

Filip (@ftack)

5 Disclaimer: I have nothing against credit checking companies.

6 http://www.sba.gov/inv

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Services28%

Web tool28%

Mobile app12%

other/ na11%

Media

(content)8%

Video5%

Web shop5%

Retail3%

Distribution of type of business (N = 61)

© i4fi & Bloovi

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funds obtained/needed (M€, N = 61)

© i4fi & Bloovi

1. Executive summary

61 companies participated in this first edition of the Belgian Web-Startup Barometer.

To participate, these companies had to have (mobile) internet as major component of

their business model. Nevertheless, the survey respondents represent a very diverse

set of activities, which we grouped in 7 specific areas.

The majority of respondents

are active in ‘Services’ (which

includes consultancy, hosting

and the development of

efficiency enhancing corporate

tools) and Web Tools (tools

that improve the efficiency of

online activities of individuals

and companies). Together they

accounted for more than half

of the respondents. 65,5% of

the startups in the survey were

created in or after 2011. 52%

of them are currently in the ‘early growth’ phase of development.

Funding obtained vs. funding needed

Almost half of the survey respondents collected funding of less than 10.000 euro for

their startup. Two third of the respondents obtained the funding from their own

money.

Taken together, these 61

startups have collected 5,5

million euro in funding so far,

but their expected funding

needs are anticipated to grow

360% to reach 25,3M in 2015.

The major purposes for the

additional funding need are

international expansion and

product development.

49% of the startups would

need additional funding of above 250.000 euro in the next three years in order to

reach their objectives.

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Projected number of full-time employees (N = 61)

optimistic

pessimistic

© i4fi & Bloovi

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Better Payment Systems

Weather

Fiscal

Dynamic startup scene

Bigger market

Proximity to partners

Legal purposes

Find skills

Proximity to investors

Reasons for considering moving abroad (N = 55, multiple selections possible)

© i4fi & Bloovi

Turnover and headcount expectations

50% of the respondents generated a turnover of less than 10.000 euro. This applies to

all the activity areas described above, except in Services where the average turnover

is about 360.000 euro.

In terms of profitability, 38% of the respondents claim to be break-even already. An

additional 10% expect to be so this year, and another additional 26% expect to be

break-even by next year. Unsurprisingly, the older the startup, the more likely it is to

be break-even already. On average, it takes the startups 21/5 years to turn break-even.

In terms of growth, the startups collectively expected to grow their turnover from

8,9M€ in 2011 to 74,9M€ in 2013, a growth of 736%7. Projected to the whole Web-

startup industry (assuming the survey respondents account for 5% of the actual

amount of web-startups in Belgium, and assuming that the number of web-startups

wouldn’t grow in the meantime), the weight of this industry in the Belgian GDP would

grow from 0,05% in 2011 to

0,41% in 2013.

In 2011 the 61 startups that

participated in this survey

employed a total of 316

employees, an average of 5,2

per startup. 92% of the

workforce was employed in

Belgium, and about 61% were

full-time employees.

By 2015 the amount of full-

time employees is expected to grow to either 558 (pessimistic scenario, which

represents a CAGR of 42%) or 1.128 (optimistic scenario, representing a CAGR of

80%).

Future prospects and

confidence

While 44% of the respondents

had no intention or plans to

move abroad, 25% indicated

to have such plans. Amongst

the most cited reasons for

such a move, the proximity to

(potential) investors and the

availability of specific skills

7 Two answers that looked awkward were ‘normalized’ to calculate the Total and averages.

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were most frequently mentioned. When asked about their preferred destination for

their startup, 52% indicated the United States.

Asked about their confidence to reach their one year objective, 69% of the startups

in the survey claimed to be confident or very confident (4 and 5 on a scale of 5).

When asked about their confidence on a three year timeframe, the level of

confidence declines to 59% (4 and 5 on a scale of 5).

The economic climate was mentioned the most as the major hurdle for these startups

to reach their objectives.

Conclusions

As this survey shows, the prospects are bright for the Belgian web-startup

community. With an anticipated turnover growth of over 700% in the next two years

and with almost 74% of the startups from the survey turning profitable by the end of

2013, most of them seem in very healthy shape.

However, these prospects might be jeopardized. Most of these companies are

dependent on a stable economic climate, which is arguably not something that can

be guaranteed for the immediate (or foreseeable) future. But besides the economic

climate, these startups clearly distinguish three areas in which they need support in

order to reach their growth objectives:

Many of these startups are struggling with what could be perceived as sales

and marketing issues. Finding the first ‘flagship’ customer, turning (free) users

into paying clients, hiring the perfect sales people, these are all issues that are

crucial for turning an early idea into growth mode.

Finding and retaining the right skills. With ‘skills’ they mean sales and

marketing skills as much as ‘developers’, programming skills. These apparently

come in short supply in Belgium.

The third issue is about finding additional investments. The major purposes for

the funding needs are international expansion and product development. Both

obviously are critical for realizing the growth potential of these startups, but as

the report shows they are finding it very hard to find these investments.

Tackling these three issues will be of vital importance to realize the full potential of

this small but growing portion of the Belgian economy.

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Visit www.belgianwebstartups.be

for the full report

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About the organizers:

The Institute for Future Insights (i4fi) was created in September 2011 by business

strategy advisor Frederic De Meyer. The mission of i4fi is to help companies

understand and anticipate long-term trends as a basis for innovation, strategy

refinement and competitive positioning improvement.

To keep informed of our research of long-term trends keep track of the blog

www.fredericdemeyer.com, or follow us on twitter (@fdemeyer) or facebook

(facebook/instituteforfutureinsights).

For more information about the services of i4fi please visit the website www.i4fi.com

or send us an email frederic@i4fi.com.

Publications:

“The impact of megatrends on your business” (English, available on Amazon.com)

“De impact van megatrends op uw business” (Dutch, available at Die Keure)

“Jong ondernemend Vlaanderen” (Dutch, available at Die Keure)

Bloovi helps the Belgian web scene to shape en grow by informing them, inspire

them and communicate with them. We share knowledge on a daily base, through our

website (www.bloovi.be), social channels, conferences and workshops. We also create

a connection between the online and offline channels. Transparency and knowledge-

sharing are essential components in this process.

Bloovi’s slogan is "News, Knowledge, Inspiration & More".