CV Sander Smits van Oyen
Born: 26 November 1958
Education: Interfaculty Business Administration & MasterBusiness Management at the Erasmus University
1985 ABN, Algemene Participatie Maatschappij
1989-2010 Co-founder and partner CDI Global (M&A consultants)
2007 - Today Co-founder and Managing Director SOVEC
2014 - 2019 Co-founder and partner GoedWerkt
Consultant, Informal investor
Hi Sander! Where did you study and how did you experience your student days?
I studied in Rotterdam and after getting my (then)kandidaats in 1982 I moved on to the Interfaculty Business Administration(IB) in Delft. I found that very interesting. Business Administration is broader than Economics, which I found very financial and numerical, and inDelft there was also a lot of attention for innovation and entrepreneurship.
The professors made us aware of the fact that with our different study backgrounds we had become so monodisciplinary - focused on one discipline - after just a few years of study that it was very difficult for us to look at a case "objectively" and listen to each other properly.The interdisciplinary approach at Delft led to different conclusions. A professor once said, "The biggest problem of a problem is to define the problem well, and if you have done that well, you already have half the solution." He also said that a real solution almost always requires a truly multidisciplinary (later this became interdisciplinary) approach. That was a huge eye-opener for me; after a few years of study, we were apparently already so "programmed" that we only approached a problem from our own background, which apparently made it difficult to talk to each other (on a professional level)! That is very topical now, by the way, with issues likeCovid-19, Black Lives Matters and climate change.
And after your studies?
After my graduation I started traveling through Asia with Liesbeth, then my girlfriend - now my wife. I have known her since I was 16 and I am still very happily married to her. I have 3 children and now almost 4 grandchildren, great!
After our trip I started working at the ABN. I knew I wouldn't be working at the bank for long, but was still interested because at a bank you get to know many different companies and sectors. At Unilever, I would be stuck with a single product group for three years and I didn't really like that. Working at ABN was quite okay. I had really nice colleagues, but it was also quite formal and bureaucratic. The course actually lasted two years, but I left somewhere along the way. I wanted to go into the venture capital business.At the time, that was certainly not done within the bank and was bad for your career, because it was not the credit profession. That's different now: everyone is stumbling over each other to be allowed to work in private equity.I was actually not at all interested in a career.
Yes, investing, venture capital! There was a frantic search for a Dutch word for it at the time, but it was never found. In those days the APM (the ABN's venture capital company) was still very small. I was the fifth employee and the profession was still in its infancy. The APM operated almost completely independent of the bank. That made it fun. We didn't have to deal with bureaucracy and were much closer to the entrepreneurs than the average banker. Investing in a company and becoming a co-shareholder is, of course, a completely different business than regular banking.
In what period was this?
Around 1986. In that period, venture capital was strongly stimulated by the government, because the Netherlands was recovering from an economic crisis and there was a lot of unemployment. The government realized that small and medium-sized enterprises (SMEs), as the engine of society, were one of the most important pillars for economic development. Therefore, it wanted to stimulate entrepreneurial investment. Venture capital was a rather new phenomenon in the Netherlands and therefore investors (including banks) had to be persuaded to provide capital. The government did this by hedging the risks in a certain way. Entrepreneurs were valued because they create jobs, innovate and, unlike the big companies, simply pay taxes. The SME sector has neither the time nor the money to avoid paying taxes.
Venture capital was still in its infancy and came over from the United States. The Anglo Saxon system, aggressive investing, undeniably brought more dynamism. It was quite exciting and I saw that the entrepreneurs still had little experience in this area. At the same time, the APM was developing rapidly and all kinds of typical banking systems were sneaking in again. That led me to leave in 1989 to set up a consultancy firm with three partners to guide entrepreneurs through the process of mergers and acquisitions. Back then, you really had to explain what exactly you were doing and there was no name fo rit yet either. Now it's called Mergers & Acquisition (M&A), CorporateFinance or Investment Banking and that too is pretty hot.
How did you then come to social entrepreneurship?
In addition to my work, I am also the father of three children - and now also of three grandchildren - and around the turn of the century I began to realize that my children were going to fly out and that it was slowly becoming their world rather than mine. I began to wonder whether I had done enough to make their world a little better. M&A was very exciting, but I realized that it did not really add much when it came to a "better world". To top it all off, one evening I was watching a documentary about shale gas with my wife, which talked about the enormous environmental consequences of extracting this gas, while the next day I was having a meeting with my international partners. At the drinks before the meeting, I was just about to tell my partners about this dreadful shale gas, when the American partner started talking enthusiastically about shale gas extraction and the enormous profits to be made. That was the final push for me. I only wanted to be involved in "positive" companies. Then, as a start to something new, I organized a trip to Africa in 2003, which ended up taking fifty guys. We went to Ghana to build houses!
Build houses? How did you come up with that?
Through an organization called Habitat for Humanity.It was my first encounter with development work where you don't 'just' give people money because they are so pathetic, but empower them to do something themselves. This was very direct, very personal and therefore very special. You can imagine that this was a great experience for all 50 men who went along.
What struck me when we were in Ghana was that the people there made choices that were actually always based on the fact that money was not available. This may have happened subconsciously, but if they had had the money, they would probably have made very different choices. Many entrepreneurs work incredibly hard, but do not have access to capital. There is also a good side to this: they think three times about the money they spend and do not squander their money (as we in Europe sometimes do). They are also often very creative and solution-oriented.
It seemed to me that if these people had access to capital, many wonderful things could come about. That's why I set up a fund from the same idea that our government had in the 1980s: investing in SMEs to stimulate economic development and especially employment. After all, poverty stems from alack of employment. Many people in Africa are, often forced by circumstances, entrepreneurs. But many other people simply cannot do that and must have a job in order to survive. And there aren't many of those in Ghana, especially for the uneducated or low-skilled at the bottom of society. To create those jobs we need entrepreneurs and we need to support the entrepreneurs with capital. This was the case in the 1980s, but it is also the case today.
Is entrepreneurship in your blood?
Yes, I think that entrepreneurship is more or less in your blood, or that it has to be taught to you in a very specific way. In my day there was little interest in entrepreneurship at the University of Rotterdam and the emphasis was really on the big corporates. In Delft there was a lot of interest, mainly driven by the logical urge for technology and innovation.Fortunately, things are different now and the EUR is working hard to fill that "gap".I see great things happening on that front and of course it is great that theRSC/RVSV, specifically the Entrepreneurs Circle, plays an active role in that!
In Africa, where you are mostly forced to be an entrepreneur, there is hardly any choice. If you can offer people jobs there -by investing in SMEs - that's fantastic. So that was the reason for setting upSOVEC: Social Venture Capital. We started in 2008 and focused on "socially relevant sectors" (basic services) such as education, healthcare and housing. We ended up making eleven investments in Ghana. Perhaps the best is a large park in the capital Accra, a former botanical garden of the University ofAccra. The Ghanaian entrepreneur in question, with roots in the Netherlands, saved this unique piece of nature from demolition. We supported him by investing and setting up a consortium with two Dutch entrepreneurs, one with a strong presence in Ghana and one with experience in "recreation". From the State we also got a nice financing. You can compare it a bit with CentralPark in New York. Without that park, Manhattan would be a lot less liveable. In Accra, a city of about four million people, this is now the only decent park left, where children can play, adults can relax or do sports and get back in touch with nature. That makes my heart tick faster!
An important quality for investing in Africa is patience and a form of modesty, or even humility and genuine respect. We do have an unintentional tendency to see everything from our own (Western) perspective, no matter how differently we mean it or how unconsciously we sometimes do so. I must admit that I still hardly understand how things are done there. A Dutch priest who has lived in Ghana for 30 years said about this, "Ghana is like the bible, after 30 years I have still not finalized Genesis" (Genesis is the first of 66 chapters).There are no standard formats like in the Netherlands and time plays a different role there. There are really very different things than here. The usual and perhaps somewhat ingrained investment concepts as we know them here often do not fit in.
When I look outside now, I see the roses in bloom. That's not really possible at this time of year. When I was young, it was prominently on the news that a wine grower had started up in Maastricht. That was big news at the time. Now they're growing wine in Norway! It can't go on like this.'
What do you see as the biggest challenge today?
Sustainability, climate change, the environment, is without a doubt the greatest challenge facing every human being on this earth. You, young people, really have a mega big problem. When I look outside now, I seethe roses blooming. That's actually not possible at this time of year. When I was young, it was prominently on the news that a wine grower had started a business in Maastricht. That was big news at the time. Now they are growing wine in Norway! In Spain and France they are afraid of desertification. Africa is drying up, the world is plagued by hurricanes and forest fires, the GreatBarrier Reef is 80% dead. It can't go on like this.
What do you think can be done about this problem? What should today's student start doing to address global warming?
I see three different directions for solutions. In no particular order, they are politics, business, and technology & innovation.
For politics, the first step is for the very best people to become politically active or at least politically engaged. Politics needs to reclaim the space that is now taken up by business too far too great an extent.At the moment, unfortunately, not many people want to enter politics, while it is actually very much needed. Politics must offer much more counterweight to the very effective, professional and far too powerful lobby of industry.Perhaps the idea of a Third Chamber offers perspective, because the role of"the citizen" should be much greater. Politics is now far too distant from society and many people no longer feel represented by politics. This is abad thing. Young and talented politicians can make a big difference.
By the way, you don't necessarily have to go into politics, but can actually get involved in all kinds of great NGOs and civic initiatives. For example, I help Extension Rebellion with fundraising.
The second option is to become an entrepreneur. As an independent entrepreneur you can make your own choices to solve a particular social problem in a very focused way. There are great opportunities there, especially at the intersection of technology and climate change: think of new forms of energy, transportation, water, air treatment, food, etc. If you choose a career in big business, you should be very sure that the company you are going to work for really fits your values, or that there is enough room to actively contribute to a change. I am rather skeptical about this, because in my opinion big companies are mainly busy defending the status quo. Fortunately, more and more millennials are choosing to set up social enterprises or to work for them. Fantastic!
To give an example about the role of capital: Shell made a film in 1991 that I think is better and more accurate than the film 'TheInconvenient Truth' by Al Gore. That film was developed at the initiative of the Alternative Energies division to convince Shell's own employees that the use of fossil fuels has disastrous consequences for the earth. In the end, this division was disbanded, no doubt under pressure from the shareholders, andShell continued to do what it is doing now, knowing full well the consequences.On the other hand, perhaps you have Unilever, with a CEO who wanted to make his company sustainable and no longer publish quarterly figures, despite considerable pressure from his shareholders, because he only wanted to work on the longer term (in which sustainability plays a major role). That CEO is now gone, but his successor has committed to the sustainability principles.Hopefully Unilever will continue to set a good example and more companies will join them.
The third option is to go into technology and innovation, in other words, back into business. That is why Delft is so interesting now, especially the combination with Rotterdam. The Entrepreneurs Circle and its committee see a very strong combination between Rotterdam and Delft. I see that too. The people of Delft are well educated, have learned to be critical and develop great technical solutions, but they need the business qualities of the people of Rotterdam to reach the market. Fortunately, these Rotterdammers are becoming more entrepreneurial and think more out of the box.
Yes they are! A tip for the readers of this article: try to find the connection with Delft. What do you actually like most about entrepreneurship, Sander?
The freedom, being able to make your own choices, flexibility, creativity, risk, excitement, but no internal politics: no knives in the back and no sawing at chair legs. I don't want to take part in political games, because it would be good for your career. I want to achieve a goal as an entrepreneur and do what needs to be done. Of course, that may sometimes require some political hassle, but I don't do it to climb the ladder or to move up a salary scale. Money is absolutely not my first priority, not even my second. I like working with people who also think outside the box in this way.
And the least enjoyable thing about doing business?
Never being able to let go is sometimes exhausting. There is always a risk involved in doing business, but that also makes it exciting. Without risk it would be a lot more boring in this world. There must be a challenge and something must be innovative.
What is your five-year plan?
I would really like to make a positive contribution to climate change and am considering setting up a fund that invests in trees. One of the things we can do to combat the climate problem is reforestation:planting trees to stop the desertification of huge areas. As part of its GreenDeal, the European Union wants to plant three billion trees in the next ten years. That's a lot, great! Many areas of the world are becoming drier and drier and are no longer habitable, so people are forced to move. This leads to enormous migration flows with all its consequences. Trees absorb CO2, provide water, coolness and diversity and offer space for sustainable agriculture.Biodegradation is seen as one of the drivers of climate change. If we succeed in planting trees and creating biodiversity in those dry areas, that would be fantastic and a big step forward. A great initiative that deals with this is Just Dig It. They involve local people in their activities; I think that's a crucial factor.
There are a number of impact funds that like to invest in sustainable technology. That's scalable and there's a lot of money to be made.So that segment is already reasonably well served by capital. If an economic model can be attached to other initiatives that are at least as important, such as reforestation, it will become interesting for large investors. I have an idea for this and am now carefully testing it.
On your website, the slogan is "entrepreneurship makes the world go round". Is that still something you swear by?
Yes, entrepreneurship is simply necessary. The dynamism of entrepreneurs is crucial to society. It is also important that these entrepreneurs are aware of their social responsibility. If you only do it for the money, that's a missed opportunity. The role of capital has become much too big in the last 30 years. In my opinion, this has to do with the fall of the wall in 1989. Before that the world was divided into communist and capitalist.That was strange and unpleasant on the one hand, but also provided a certain balance.There were also small cells in our society that were communist, and they acted as a kind of counterveiling power. After the fall of the wall, many safety valves in the capitalist system, which were there for a reason, were rapidly removed. The concept of shareholders value has gone too far as far as I'm concerned. As a result, the power of capital has increased unbelievably and has gone beyond its own limits. The result is environmental problems, but also social inequality that has gotten out of hand.
Do you, as a person, rely more on your feelings or on reason when you go into business with a company?
I rely on my gut feeling, because the first thing you do is invest in people. If the numbers don't turn out, but you have a good entrepreneur, he or she will come up with a scheme and things will work out anyway. If there are great plans and numbers, but the entrepreneur is not good, then you have a problem "You invest in the (wo)man, not in the plan."
What do you do in your spare time?
Sports, I still like to play soccer and of course I have been skating these last 4 days! I play soccer on the same level as the AmstelBoys, with caps and little pawns and so on. I also sail a catamaran, which is a bit like doing business: you have to be very alert at all times (if there is a strong wind, but otherwise you don't go) because everything can change at any moment. Sailing is a matter of feeling. A catamaran has no instruments. It goes fast, so you have to react quickly. You can also sit in a yacht, but that's a different matter as far as I'm concerned. This is faster, more agile and very challenging.
How do you keep the work-life balance?
I didn't have one, but I now have my grandchildren onFridays and of course I play soccer on Saturdays. Both are sacred and I enjoy both immensely. I sail whenever I can, if there's a strong wind, and preferably on Sundays. So now there is more of a balance than before. My family comes first. I love my (grand)children and the fact that I am now a grandfather gives me an even more penetrating perspective on the future of their (and your)world.