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[Nettime-nl] EuropeNow bezoekt digitaal Amsterdam
geert lovink on 10 Nov 2000 00:39:57 -0000


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[Nettime-nl] EuropeNow bezoekt digitaal Amsterdam


nowEurope: City by City
A city-by-city look at who's building the European Internet
Thursday, November 9, 2000

FIRST GLANCE
    Amsterdam, NL - The Internet grows up

BIRD'S EYE VIEW
    With eMarketer

ON THE GROUND
    XS4ALL _ Grown up or sold out?
    Nerve Wireless - Babble and brilliance
    //hot-orange - Troubling signs from another e-tailer
    MoneyPenny - The virtual assistant
    RealMapping - Where are you?

WHERE'S THE MONEY?
    Gorilla Park - Looking for lightning

AD VALUE
    24/7 - Being European in Amsterdam

THE GURU
    Rop Gonggrijp

LAW & ORDER
    Privacy - The not-so liberal Dutch

CONFERENCE BEAT
    Upcoming Events in Europe

ACKOWLEDGEMENTS
    We value reader tips and contacts

HEARD IN AMSTERDAM

   "We were the radical left-wing hackers selling out to the
   evil green empire." -Sjoera Nas, XS4All public affairs
   officer, on the 1998 sale of Holland's rebel ISP to phone
   company KPN.

__________________________________________________________________
FIRST GLANCE
The Internet grows up

   Who could be surprised that Amsterdam embraced the Internet so
   early? Only about 800,000 people live here, squeezed into so
   many doll-house buildings tucked along narrow streets and
   quaint canals. Yet it's a town bursting with energy, creativity
   and the distinct whiff of counter-culture. This is the city of
   dope-dealing "coffee houses," of pirate radio. It's a place
   that, despite the ruthless charge of free-market individualism,
   seems still to foster the values of communalism. It's no wonder
   that in the early 1990s this city so embraced the ownerless and
   egalitarian Internet. But that was before the Internet was all
   about venture capital, IPOs and burn rates.

   Those groovy days are over. The Internet is growing up, and the
   growing pains are evident in Amsterdam. Groundbreaking Internet
   access provider XS4ALL, the symbol of the free-spirited
   Internet in Holland, is now owned by KPN, the big, bad phone
   company. University hackers and computer adventurers like Rop
   Gonggrijp and Jerome Mol have made millions from their first
   hi-tech ventures and have moved on to become serial
   entrepreneurs, spreading cash and experience to younger
   go-getters. Aside from a few throwbacks, it's all business now.
   People are still having fun, but you wouldn't exactly call it a
   gritty, cultural scene. So, we ask of Amsterdam, when the
   Internet grows up, does it have to sell out?

   The answer is, not completely.

__________________________________________________________________
BIRD'S EYE VIEW
with data from eMarketer

   "On the European continent," reported Forbes Magazine in
   February 1999, "on the Dutch have truly fallen in love with the
   Internet."

   True enough. By 1995, 44% of households in Holland had their
   own PC. That was up to 53% in 1999. One-third of those PCs have
   an Internet connection. A quarter of the Dutch population carry
   mobile phones.

   Research by eMarketer shows 2.51 million "active Internet
   users," or 20.3% of the adult population. (Angus Reid Group
   reports 4.7 million-38% of adults-while Pro-Active Research
   shows 2.3 million-18.6%). By 2003, eMarketer believes 3.46
   million adults will be active users.

   The market is boosted by a liberalized and highly competitive
   telecoms field. There are approximately 60 alternative
   providers after market leader KPN, the former state-owned
   monopoly. The ISP market is also highly competitive. As a
   result, connection costs are relatively low. Based on 20 hours
   use, monthly ISP fees average Euro 6, with phone tariffs adding
   another Euro 30.

   Total e-commerce revenue in the Netherlands in 1999 was Euro
   1.56 billion. EMarketer predicts that will rise to Euro 3.12
   billion in 2000, and to a more impressive Euro 25.2 billion by
   2003.

   Curiously, however, the outlook for e-commerce in the
   Netherlands may be somewhat mixed. According to Andersen
   Consulting, Dutch businesses are more skeptical than other
   Europeans regarding the competitive advantages offered by
   e-commerce. The Dutch are also less likely than the rest of
   Western Europe to believe that e-commerce will create new
   revenue sources or more intense competition, leaving them, in
   Andersen's opinion, vulnerable to external competition.

__________________________________________________________________
ON THE GROUND
XS4All - Grown up or sold out?

   Since 1993 XS4ALL has been an ISP with an attitude. Founded by
   a small rabble of hackers, the company has been a warrior in
   the battles to protect privacy and free speech on the Internet.

   They have won separate fights against the German government and
   the bullying American-based cult Scientology after each sought
   to block controversial material posted on sites hosted by
   XS4ALL. The company has also constantly stoked the debate over
   privacy, jealously guarding the privacy of their own customers
   while attacking those who abuse public trust.

   Then came the shocker of December 1998, when the founders sold
   100% of XS4ALL shares to phone giant KPN. The decision, says
   XS4ALL's public affairs officer Sjoera Nas, was based on the
   need not for cash, but for broadband access, which XS4ALL could
   not adequately provide its growing and profitable list of
   corporate clients. The company had also simply outgrown its
   organic structure. "The founders were uncomfortable in
   management roles. Every decision was made by committee. It was
   chaos," Nas recalls.

   The sale price is, remarkably, still secret. But KPN did openly
   guarantee complete independence for three years. XS4ALL has,
   however, tapped KPN's vast resources and business experience.
   Help has come in structuring the staff more efficiently,
   recruiting new managers, providing management models and
   funding a budget for employee education. And the bottom line
   has benefited. Revenues and profits rose from Euro 9.1 million
   and Euro 910,000 in 1998, to Euro 13.6 million and Euro 1.36
   million in 1999. This year's figures are expected to top
   Euro 18.2 million and Euro 1.8 million. The company now has
   90,000 subscribers and claim to be the leading European
   provider of DSL services.

   But has XS4ALL lost its heart? Has something of the early
   Internet died along the way?

   Most of the old founders are gone. The staff size has grown to
   almost 140. "It isn't the same," concedes Nas. "It used to be
   an elite club." But to its credit XS4ALL has, in many tangible
   ways, remained true to its ideals.

   The company has continued fighting all government attempts,
   even as part of criminal investigations, to gather information
   about XS4ALL customers. They have also continued their support
   of the dissident Yugoslav radio station B92, hosting the
   group's news website and chat forums.

   XS4ALL also sparked a major debate over privacy after running a
   gutsy ad campaign last December attacking several free-service
   ISPs that claimed to protect user privacy. The big poster ads
   featured verbatim quotes from the terms and conditions of five
   free providers regarding their actual use of subscriber
   information. For instance:

   "Microsoft does provide certain user information in aggregate
   form to third parties, including its advertisers, for
   demographics." - MSN Hotmail terms of service, Microsoft

   Two of the targeted companies sued, but an extraordinary string
   of triumphs followed. XS4ALL won the court cases while drawing
   massive public attention to a critical issue and an enormous
   amount of free, positive publicity for themselves. In addition,
   the Dutch government was moved to investigate the topic of
   Internet privacy. Officials ended up issuing a sweeping warning
   that user privacy was being trampled at nearly every ISP in
   Holland. Only XS4ALL was singled out for praise in the report
   for its handling of user privacy.

   Sold out? Perhaps not, after all.

<http://www.xs4all.nl>
<http://www.kpn.com>


__________________________________________________________________
NerveWireless - babble and brilliance

   When nowEurope sat down with Lippe Oosterhof, 29, the
   baby-faced VP for business development at start-up Nerve
   Wireless, it took a while to cut through all the jargon and IT
   razzmatazz before we figured out what this company actually
   did. But after a cup of tea at the Tornado-Insider/Gorilla Park
   bar, it started to become clear.

   Put simply, Nerve Wireless provides an online space, accessible
   via GPRS, filled with little tools for assisting communication
   and decision making within cross-company working groups.

   Need to share a document? Plop it into the space-with varying
   levels of access-and send a message to every member of the
   team. One of the team members is traveling and can't get
   online? He'll get the message on his phone and can then
   instruct the system to zap the document to a nearby fax
   machine. The space also contains clever automated helpers for
   making quick group decisions, sharing contact details and
   synchronizing schedules.

   The idea is not entirely new, but Nerve Wireless raises the
   level of sophistication without creating the need for any
   shared infrastructure. Thus, Nerve Wireless' target market of
   small, independent firms, who tend to work constantly with
   other small companies, project by project.

   Nerve Wireless will test the beta version of their product on
   50-100 WAP-carrying people this month. 'nowEurope: City by
   City' readers with WAP-enabled phones can take part in the test
   by contacting Nerve Wireless at: <mailt:beta {AT} nervewireless.com>.

   A soft launch for the final product is planned for Dec. 1, and
   a more trumpeted introduction to the UK, Holland, Scandinavia,
   France and Germany, where they reckon there are 1.2 million
   potential users, comes in February 2001.

   The brainchild of Simon Williams, 30, of the UK, formerly VP in
   charge of mobile commerce for ABN AMRO Bank, Nerve Wireless is
   wonderful proof the American Internet start-up fever is taking
   root in Europe. They are young, smart and bent on two things:
   making money and having fun. "We have a no asshole rule here,"
   grins Oosterhof.

<http://www.nervewireless.com>

//hot-orange - Not enough like hot cakes

   Not everyone has abandoned web retailers.

   Roel de Hoop, the tall square-jawed boss of //hot-orange,
   Holland's online department store for yuppies, is about close a
   Euro 10 million round of funding from yet-unnamed venture
   capital funds and strategic investors. That marks the fourth
   time since //hot-orange's conception in September 1999 that de
   Hoop has raised cash for his company, the Netherland's second
   largest e-commerce site.

   First came incubator Gorilla Park, headed by de Hoop's old
   friend and colleague Jerome Mol (see Where's the Money?
   section), which took its standard 25% for Euro 500,000. In
   January, the independent VC fund NeSBIC Cte Fund dropped in
   Euro 2.7 million. A month later, European voice, data and
   Internet broadband services provider Versatel pumped in an
   undisclosed amount. One wonders whether de Hoop has any shares
   left for himself.

   More polished and experienced than many CEOs inside Gorilla
   Park, De Hoop remains outwardly confident. Asked if
   business-to-consumer e-commerce isn't yesterday's mistake, he
   replied with a firm "Bullshit." He adds, "Fundamentally, we're
   better than we thought we'd be at this point."

   Unfortunately, de Hoop won't back that up. He won't disclose
   revenue figures or even say how much traffic his site is
   getting. Those are not good signs for a company in electronic
   retailing, a field known for its conspicuous ability to lose
   wheelbarrows of money.

   The retail strategy for //hot-orange is clear enough. It sells
   products focused on "the good life." Lots of wine, flowers,
   perfume, books, CDs, home and travel accessories and electronic
   items. "It's targeted at young professionals for whom money is
   not the issue, but time and quality," says de Hoop. One survey
   shows brand recognition among Dutch web users to be an
   impressive 73%.

   But will this Dutch-only site draw enough customers? With no
   concrete results made public, we can only guess the answer is,
   so far, probably not.

<http://www.hot-orange.com>
<http://www.gorillapark.com>
<http://www.versatel.com>


MoneyPenny - The virtual assistant

   Clad in a snake-skin jacket, Marianne Sturman is a petite
   bundle of energy running an Internet start-up. But, with a
   young child at home, the 36-year-old isn't keen on spending 80
   hours a week in the office.

   How appropriate that she, along with partner Natasja Fortuin,
   runs MoneyPenny, a company that allows Dutch women with
   children and work experience a new way to fit work around
   family demands.

   MoneyPenny (named for the MI6 secretary in James Bond films)
   matches employers with at-home secretarial and administrative
   workers (they don't have to be women, actually) and provides an
   online space for swapping documents and other communication. In
   addition to assigning temporary workers for larger companies
   like Siemens and Ericsson, MoneyPenny also specializes in
   providing so-called virtual assistants for small companies and
   freelance professionals.

   Virtual assistants are a widespread phenomenon in the US, but
   have emerged as a loose network of independent operators.
   MoneyPenny is possibly unique in bridging the gap between the
   temp agency and the independent virtual assistant. It's
   certainly new for women in Holland, where the concept of
   flex-time hasn't exactly thrived. "We don't have to advertise
   for workers. Women come to us because they are desperate for a
   flexible working arrangement," Sturman says.

   A tight labor market doesn't hurt either. After six months and
   with no concerted promotional campaign, MoneyPenny is breaking
   even with about 50 people assigned to about 40 clients. They
   already have 500 more applicants, of which they expect to
   contract about half. MoneyPenny aims to build a database of
   1,000 workers by the end of 2001.

   Sturman and Fortuin hope soon to raise about Euro 1.4 million
   to fund expansion, but not from traditional venture capital.
   "We don't want to become a multinational," says Sturman. She's
   got a home life, after all.

<http://www.moneypenny.nl>


RealMapping - Where are you?

   When he ran his own web development shop, Sjoert van Gelderen,
   30, learned something about his clients: They didn't know
   enough about the people coming to their sites.

   So, after he sold out to the US's Webtrends, he knew what he
   wanted to do next. Thus was born RealMapping, a company that
   provides advanced forms of identifying the location of web
   users, allowing site operators to customize their pages to the
   user.

   For instance, surfers in France and Germany entering the same
   URL each end up seeing pages in their own language, with ads
   aimed at their market. Users logging in from a university or
   school will get versions aimed at students. And soon,
   RealMapping will offer the ability to identify users logging on
   from corporate addresses.

   RealMapping claims a unique method of recording IP addresses
   that allows continuous updating of their address database,
   which contains 4.25 billion current IP addresses. They also
   claim an accuracy rate of 97.5%. One big disadvantage comes
   when dealing with customers of larger providers. Every AOL
   customer, for instance, can only be located in Dulles,
   Virginia, no matter where they actually are.

   The company's advantage, however, may prove to be their limited
   goals. They don't offer more information about users-names,
   real addresses or surfing habits. "And that's the way we want
   to keep it," says RealMapping chief commercial officer Mark van
   der Linden. That's for marketing-oriented services, says van
   der Linden, and that leaves RealMapping to concentrate on its
   technology.

   So far, so good. Newconomy bought a 15% stake in May, which is
   helping RealMapping open offices in New York and Hamburg this
   month.

<http://www.realmapping.com>
<http://www.newconomy.com/eng/>


__________________________________________________________________
WHERE'S THE MONEY?
Gorilla Park - Looking for lightning

   Lightning already struck Jerome Mol once. In 1997
   Hewlett-Packard bought his Amsterdam-based software company,
   Prolin Automation, for a cool Euro 60 million. From the comfort
   of his California mansion, he then plotted his next two moves.

   The first was Tornado-Insider, the magazine that has become one
   of the bibles of the Internet economy. But number two, he
   reckoned, would be the big one: a network incubators spawning
   Internet start-ups.

   Inspired by a Geoffrey Moore's best-selling 'Crossing the
   Chasm,' which described market-leading companies as "gorillas,"
   Mol launched Gorilla Park in October 1999. And now he's nursing
   baby gorillas in Amsterdam, London, Paris, Munich and San
   Francisco.

   Incubators are, indeed, beginning to perform a crucial role in
   business development across Europe. Venture capital is still a
   relatively new phenomenon on the Continent, and has still not
   fully matured. A gap clearly existed for start-ups that need
   more help than just cash. Indeed, many small companies need
   less cash than the minimum amount most VC funds are interested
   in investing.

   Trouble is, e-incubators are suddenly a dime a dozen. There are
   no fewer than 14 in Holland alone. So, is Gorilla Park the
   gorilla in this market?

   Well, it's spending gorilla-like. With 14 baby gorillas (one
   has died already), the company has quickly burned through the
   initial Euro 15.6 million with which it launched, and has
   raised an additional Euro 48 million from the likes of Cable &
   Wireless, ABN AMRO, Goldman Sachs and Deutsche Bank.

   Gorilla Park truly seems to fawn over their start-ups as they
   drive them through an eight-step process aimed at making them
   "IPO-ready" within 18-24 months. All the small headaches of
   arranging basic services and administering a business are taken
   care of. Legal, financial and management guidance all come with
   the package. And they're not stingy. Gorilla Park has 87
   employees serving its 14 babies.

   Perhaps most telling, despite the rigorous competition and a
   ruthlessly inflexible policy of a taking 25% equity in exchange
   for Euro 500,000, start-ups are still lining up to get in.
   Gorilla Park has gained a reputation for delivering a lot more
   value than the relatively small pot of cash they hand out.

   "Our first reaction to [the offer] was, 'Hey guys, that's not
   fair'," says Lippe Oosterhof of baby gorilla Nerve Wireless
   (see On the Ground section). But it was a take-it-or-leave-it
   deal, and Nerve Wireless took it. "It proved, after all, to be
   a good decision," says Oosterhof.

   It's too early for Gorilla Park's first exit, so it's also too
   early to say whether lightning will strike again for Jerome
   Mol. But he's got a few kites up in a storm.

<http://www.gorillapark.com>
<http://www.tornado-insider.com>

__________________________________________________________________
THE GURU
Rop Gonggrijp

   When Rop Gonggrijp and partners founded XS4ALL in 1993, the
   first consideration was staying out of prison. In those early
   days, the only opportunity for Gonggrijp and his
   technically-savvy friends to access the Internet was through
   "borrowed" university accounts. When Holland passed a computer
   crime law that year, the group decided starting an ISP was a
   better option than jail.

   Holland's rogue ISP (see ON THE GROUND section) also had a
   mission, defiantly proclaimed in the name of the company:
   access for all. What's more, Gonggrijp and friends were
   determined to demystify the Internet, and to defend it from any
   power that threatened to dominate, subvert or censor the
   medium. But XS4ALL's attitude actually has its roots in an
   earlier vision, that of the hacker movement.

   In late 1980s, Gonggrijp began publishing the widely-circulated
   hacker newsletter, 'Hack-Tic', which proved a lightning rod to
   the Dutch hacking scene. It printed essays on software hacks,
   computer viruses, telephone hacking, magnetic cards, and lock
   picking. They also exposed security weaknesses at the Dutch
   phone company, KPN, and other prominent Dutch companies. These
   pranks earned the group notoriety in Holland and abroad,
   bringing important issues to the public awareness. And at the
   center of this media circus, Gonggrijp amused himself as
   ringmaster, rabble-rouser, and digital dilettante.

   1993 was a magical year for Gonggrijp and friends. Following
   the launch of X4ALL on May 1, Gonggrijp organized a three-day
   summer hacking conference on a campsite at Larsenbos, called
   Hacking at the End of the Universe. Hackers brought their
   computers to the campground to assemble what was later billed
   as "the largest non-military network to be set up in the open
   air."

   By 1996, Gonggrijp had decided to remove himself from the
   public eye. The Internet was now front-page news. XS4ALL was an
   early success, and Holland's colorful, anarcho-hippy hacker was
   obvious bait for a voracious press. "The problem with
   overexposure is that you start to become your media
   personality," Gonggrijp says.

   In 1997, Gonggrijp left XS4ALL to start an Internet security
   consultancy, ITSX. Also that year, Gonggrijp and friends
   organized a follow-up to the HEU event, Hacking in Progress,
   which attracted 2,500 hackers to a campground outside Amsterdam
   served by a microwave IP connection and a glass-fiber network.

   Success seems to suit Gonggrijp. He hasn't changed his values,
   or his friends, but then many of his old hacker buddies are
   also Internet millionaires. Gonggrijp luxuriates in spending
   time with his long-time partner, Carla van Rijsbergen, and
   their twin toddler sons. He's using his new wealth to renovate
   a five-story Amsterdam house - two floors for the family, one
   floor as an office, another floor for visiting friends, and the
   ground floor as space for events, parties and happenings.

   Also in the works: a hacker retreat in Costa Rica (he's already
   bought an option on the land), and an open-air hacker
   gathering, Hacking At Large, tentatively scheduled for Summer
   2001, in Enschede, Holland.

<http://www.xs4all.nl>
<http://www.hacktic.nl>
<http://www.itsx.nl>
<http://www.hip97.nl>
<http://www.hal2001.org>


__________________________________________________________________
AD VALUE
24/7 - Being European in Amsterdam

   When it came to tapping the European market, for online
   advertising and marketing specialists 24/7, that meant being
   European. And that meant being based in London wasn't good
   enough.

   "We didn't want to be Anglo-centric. We wanted a European
   focus," says Gordon Simpson, CEO of 24/7 Europe.

   Simpson, a 48-year-old Scotsman whose company, Interactive
   Holding, was bought out by 24/7 last year, chose Amsterdam. It
   makes sense. The tax and regulatory regimes are friendly,
   Schipol Airport is a fantastic transport hub, Dutch is nearly a
   second language in Amsterdam and Holland is at the forefront of
   the Internet revolution on the Continent.

   Of the Euro 1.2 billion expected to be spent on online
   advertising this year in Europe, the burgeoning Dutch market
   should account for about Euro 54 million, more than double the
   Euro 24 million spent in 1999.

   Most of that, 60%-70% according to Govert van Eerde, 24/7's
   Benelux regional director, comes from dot-coms. The financial
   and auto sectors are also beginning to spend more heavily.

   As elsewhere, however, 24/7 is seeing a shift in focus from
   straight online advertising to more targeted electronic
   marketing campaigns. 24/7 Europe still draws 80% of its
   revenues from selling online ad space. But the 20% from online
   marketing techniques is up from zero just two years ago. Most
   of that is spent on targeted emails sent on an opt-in basis,
   only. In other words, the recipient has ticked a box giving
   permission to send marketing information.

   "More companies are moving toward customer management and
   loyalty programs," says Simpson. "Some of them will never sell
   much online, but they can retain their customers that way."

   And that means huge savings compared to direct mail for
   promotions and green numbers for customer management.

   The next step is part of the great European gamble on mobile
   technology. In addition to sending ads via SMS, 24/7 has
   started the first WAP ad server in Europe, which delivers ads
   via GPRS. Yet another company crossing their fingers over WAP.

<http://www.247europe.com>


__________________________________________________________________
LAW & ORDER
Privacy - The not-so liberal Dutch

   The Dutch take their civil rights pretty seriously. You won't
   catch many in Amsterdam crying, "What Holland needs is a strong
   leader. Someone to make order." Moscow it isn't.

   But are you ready for this? Dutch law enforcement authorities
   last year received judicial approval to tap more than 10,000
   phone lines in 1998. That's one for every 1,600 citizens and
   more in absolute numbers than in Germany or the US. Maybe it's
   not such a liberal state after all.

   And now, as elsewhere, Dutch cops want access to Internet
   traffic. In December 1998, the Dutch parliament passed a new
   telecommunications law that, among other things, required ISPs
   to make user accounts accessible to the authorities with a few
   keystrokes and a judge's order. That would make it far easier
   to read someone's email and check their surfing habits.
   Previously, authorities had to bring in additional equipment
   and rig it up themselves.

   ISP XS4ALL (see ON THE GROUND section) is refusing to
   cooperate. And, so far, the authorities aren't pushing the
   little company that has a history of winning legal battles.
   "They don't want to use us as a test case," chuckles XS4ALL
   public affairs officer Sjoera Nas.

   That may mean that, in Holland, law-abiding privacy lovers and
   criminals have a safe place to surf and send email (unless
   their email traffic travels through the US, but that's another
   story). And if XS4ALL is eventually forced to submit to the new
   order, both will suffer.

<http://www.xs4all.nl>
<http://www.minjust.nl:8080/>

__________________________________________________________________
 
   nowEurope would like to thank the following people for their
   help in preparing this issue:

Monique van Dusseldorp, with van Dusseldorp and Partners
   <mailto:monique {AT} vandusseldorp.com>

Tim Lunn, of First Tuesday Amsterdam
   <mailto:tim {AT} lunn.com>

Ardith Rotz
   <mailto:Ardith.Rotz {AT} bt.com>

__________________________________________________________________
MASTHEAD

Copyright 2000 nowEurope Publications

Published by Steven Carlson <steve {AT} noweurope.com>
Edited by Christopher Condon <chris {AT} noweurope.com>
Sponsorship enquires: Buba Dolovac <buba {AT} noweurope.com>

nowEurope: City by City is a sister publication of the nowEurope
discussion forum, serving European Internet professionals since
1995. The nowEurope archives are located at:
<http://www.topica.com/noweurope-digest/read>

 


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