The Mafia Effect: How Successful Ventures Spawn Entire Ecosystems

A few weeks ago, I came across a LinkedIn post by Marcel Van Oost (whose content is truly remarkable, so if you’re not already following him, make sure to subscribe to his updates). Marcel’s post shed light on the "Revolut mafia". In just five years, 102 Revolut alumni-led startups (such as Payday, Kiko, Belvo, Fuse, Pledge, Flux, Sync, Sardine, and more) have collectively secured an impressive $2.2 billion in funding. This surpasses Revolut’s own funding of $1.7 billion, highlighting the profound ripple effect that a successful startup can have.

We are all familiar with the iconic story of the "PayPal mafia", a group of former PayPal employees and founders who, after the sale of PayPal to eBay in 2002, catalyzed the growth of numerous successful tech companies:

Peter Thiel, PayPal co-founder and former CEO, is often referred to as the "don" of the PayPal Mafia. He became one of the earliest investors in Facebook and founded the hedge fund Clarium Capital Management and the software company Palantir Technologies.
Max Levchin, another PayPal co-founder and former CTO, later co-founded Affirm, a Buy Now Pay Later player. He was also an early investor in the crowd-sourced business review platform Yelp (co-founded by Russel Simmons, who was also a PayPal engineer).
Elon Musk, a PayPal co-founder and arguably the most recognizable member of the PayPal mafia, has an extensive list of accomplishments, including founding Tesla, SpaceX, Neuralink, and The Boring Company. His recent acquisition of Twitter (now X) further solidifies his tech guru status.
Reid Hoffman, a former PayPal executive, went on to found LinkedIn.
David O. Sacks, former PayPal COO, later founded Geni.com and Yammer.
Steve Chen, Jawed Karim and Chad Hurley, 3 former PayPal employees, co-founded YouTube.

Other examples, besides Revolut as mentioned earlier, also exist:

Square Mafia in the US: Alumni from Square have been instrumental in launching companies like Opendoor (real estate), Faire (wholesale marketplace), DoorDash (food delivery service), Hummingbird (AML), Indie (banking app), and more.
Monzo Mafia in the UK: Monzo alumni have played crucial roles in Plend (lending), Fronted (rental deposit), Lollipop (grocery shopping assistant), 11:FS (Fintech consultancy), Fintrail (financial crime consultancy), and others.
Transferwise (Wise) Mafia in the UK: Former Transferwise employees have been at the forefront of startups like Plum (personal saving assistant), Candu Labs (user onboarding), Qatalog (virtual workspace), Taxscouts (tax declarations), Salv (AML), Finanzfluss (PFM), and more.
Klarna Mafia in Sweden: Klarna alumni have ventured into companies like Anyfin (app to refinance debt), PFC (neobank), MODIFI (trade financing for SMEs), Brite (A2A payment tool), Zimpler (payment solution), stoEr (mortgage solution), TrueAccord (debt collection), and beyond.

These examples underscore the potential of a highly successful startup to serve as a catalyst for a thriving ecosystem of new startups. Such ecosystems, often characterized by a concentration of startups within a specific industry or region, owe their existence and momentum to the pioneering success of the initial startup. The impact of these ecosystems reaches far beyond the original venture.

The reasons behind this snowball effect are evident:

Knowledge and Experience: Employees at successful startups gain valuable insights into innovative technologies and the intricacies of scaling a business from a small startup to a corporate giant. These startups serve as excellent learning grounds for future founders. Additionally, working at such startups provides a front-row seat to market dynamics, making it easier to identify gaps and opportunities.
Funding Source: Founders and early employees of successful startups often cash out their shares, which, in many cases, become a substantial source of funding for future ventures.
Networking: Successful startups tend to attract highly talented individuals. Years of collaboration with such individuals create valuable networks, a prerequisite for launching successful startups in the future.
Inspiration: One success story has a cascading effect, inspiring others. The tales of young tech entrepreneurs becoming millionaires, or even billionaires, in just a few years can motivate numerous young individuals to pursue science and technology and embark on entrepreneurial journeys. The absence of such examples nearby can, conversely, serve as a deterrent.

Unfortunately, Belgium lacks a prominent international example of a catalyst startup. Belgian success stories are often acquired by international players before they can grow into large international unicorns. Examples include Silverfin and Yuki (accounting software, both acquired by the Norwegian company Visma), LMS International (acquired by Siemens), Ubizen (acquired by Cybertrust), ICOS Vision (acquired by US company KLA-Tencor), Ogone (acquired by French company Ingenico), and Callataÿ & Wouters (acquired by French Sopra group). As these exits often occurred too early to be inspirational, none of them has ignited a substantial ecosystem.

However, the tech landscape in Belgium isn’t entirely bleak. Some companies in Belgium, both founders and employees, exhibit signs of creating an ecosystem. The most notable ones include:

Clear2Pay: This international fintech payment company was acquired by FIS for 375 million EUR in 2014. Its founders, Michel Akkermans and Jurgens Ingels, are now among the most influential tech venture capitalists in Belgium. Michel Akkermans has invested in Belgian tech companies such as Awingu (homework software), Intix (payment specialist), Cashforce (cashflow management), B.Fine (regulatory financial reporting), NGData (Customer Intelligence), Yield.io (Model Risk Management), Monitr (cashflow management), and more.
Jurgens Ingels is also deeply involved in tech startups in Belgium and the rest of Europe through SmartFin Capital. Some examples of his investments include CrazyGames (games), Payflip (HR Tech), Timefold.ai (AI scheduling optimizer), Hex-Rays (IT security), Timeseer.ai (time-series analytics), Willow (social media publishing), Deliverect (online food ordering), Itineris (ERP solution for utilities companies), Bright Analytics (management reporting), NGData (Customer Intelligence), and more.
Skynet: Founded in 1995 as a Belgian internet provider, Skynet quickly became the largest internet provider in Belgium. In 1998, it was acquired by the largest telecom operator in Belgium, Belgacom (now Proximus). The three founders of Skynet later created an online broker, Keytrade bank (sold in 2007 to Crédit Agricole), a payment startup Tunz (sold in 2012 to Ogone, which was subsequently acquired by Ingenico), and PingPing, a mobile micro-payment platform. They also became early investors in Monizze, a social voucher issuer in Belgium, successfully challenging the historical Sodexo-Edenred duopoly.
Netlog: Netlog was an early Belgian social network site, mainly active in Europe. At its peak in 2013, it had over 100 million accounts. The company can proudly claim to have a "Netlog mafia," with its executives, including Toon Coppens, Lorenz Bogaert, Nicolas Van Eenaeme, and Vincent Verlee, being the driving force behind dozens of later tech startups. These include Xpenditure (now Rydoo, digitalization of company expenses), Twoo (dating platform), In The Pocket (digital product studio), Realo (real estate data marketplace), Engagor (customer communication via social media), Qollabi (business relationship management), Introw (B2B lead management), Delta (crypto portfolio), and more. Some of these companies have themselves created new success stories, like Showpad (sales and marketing platform), which emerged from In The Pocket.
CapCo: Founded in 1998 by Rob Heyvaert, CapCo was a consultancy company specialized in capital markets. It was sold to FIS in 2010. Given its employment of numerous young Belgian talents in the financial services sector during the Dot-com bubble era, its employees later assumed key roles in many financial companies in Belgium. Although not widely recognized, CapCo quietly nurtured a pool of talent. E.g. Stefan Dierckx founded in 2006 Projective, which is now a major financial services consulting group, employing more than 1000 consulting experts.

In addition, there are several promising tech startups in Belgium that have the potential to serve as the foundation for new ecosystems, including:

Odoo: An open-source ERP solution for SMEs.
Deliverect: A platform for managing online meal deliveries for restaurants.
Collibra: Specializing in data governance and intelligence.
Showpad: A sales management platform.
Dstny: cloud-based telecom solutions

For example, Collibra is already displaying early signs of creating an ecosystem centered around data engineering and data science in Brussels.
Unlike other large tech players that often take many years and multiple acquisitions to reach their current size (e.g. Unified Post or team.blue), these tech startups have experienced rapid growth trajectories, and their founders are actively involved in the company. They are also frequently featured in the media and invest in the tech ecosystem. Examples include Fabien Pinckaers for Odoo, Zhong Xu for Deliverect, Felix Van de Maele for Collibra, and Louis Jonckheere for Showpad. These factors create the perfect recipe for a new ecosystem. Let’s hope that the Belgian government will support and nurture these startup ecosystems, paving the way for Belgium to become the European Silicon Valley.

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