You would like to think it’s enough to hang out in a grunge pop-up office, mix with interesting people during your lunch break, attend to all too many startup-ecosystem events in your city – and pitch your innovation or company to people around you. But the truth is this is a neverending story and I have witnessed too many companies trapped in this loop for too long while some other takes the market share and wins the business.
Finns do well in innovation indexes, we do mediocre in attracting investments compared to the other Nordic countries – where we still can’t keep up is the outcome: capturing the value, bringing big exits – companies growing out of the startup phase into a global success stories.
I have been following companies in the Nordics closely – some of them I have met first time already in 2009 when I started in the Finnish Cleantech Cluster (Ministry mandated program) and then through the years of organizing the Cleantech Venture Day™– one of the oldest and largest cleantech focused investor event in the Northern Europe – and connecting innovations with large corporates and investors through GLOBENIA, the digital innovation hub. I have also had the privilege to benchmark the national ecosystem and innovations with a larger pool of companies through my work in the board of the Global Cleantech Cluster Association (GCCA) and the history of the Global Cleantech Later Stage Award.
While Finland is the promised land of engineers and other highly educated people ready to solve the most urgent problems of our time, and our society is very well equipped to support R&D of technologies – we do seem to lack something. That certain winning entrepreneurial type. Things are changing for the better and more and more students want to be entrepreneurs and you can actually see how startup founders have become the new age heroes.
What are we still missing?
First of all, the society doesn’t treat well failure – so failing with your company is difficult, bankruptcy is a personal disaster and legally a mess at the same time pulling the welfare system carpet under your feet. We are also a bit lazy – and not willing to take risks. Once the company makes enough money to pay a good living and a nice car, we stop taking risks and investing. Is it because of the Nordic welfare system or how we are brought up but it seems that we’d rather impress our friends with a quality home or exclusive free-time endeavors than stories on how we strive to be on the cover of Forbes as the Entrepreneur of the year.
Finns won the happiest nation index recently, which only got me thinking that are we too happy with the way of life in Finland, that we stop trying to do more. Does it also lead us thinking that the innovations we build here, are unique and nothing happens outside our happy bubble. So we keep fine tuning and developing in our own territory forgetting that there is no such thing as a unique idea or innovation. There’s always someone who is thinking almost the same way and the timing is crucial. That’s why many venture capitalists say they always invest on the team – not on the technology or solution – because the team is the differentiator and only the best teams win. This usually means hungry teams who are running faster and working harder than any other team in the world.
This brings me to my last difference that separates in many cases the innovative startups here in the Nordics with the global unicorns. They simply don’t strive to be that. No startup event or accelerator is going to change. Entrepreneurs need to realize that you can make it to the top of the National League by playing safe and covering your own ownership in the company – gathering funding piece by piece and taking the markets slowly. But if you want to win in the Champions League, you need to compete globally against the best marketing teams in the world, you need networks, lots of risk money and you need to get out of the comfort zone. This June at the Cleantech Venture Day, we will hear the success story of Nest – the “thermostat that will save the world”. In 2011, they gathered a team with knowhow from different industries: consumer product understanding (Apple, Google, Microsoft), people who can build media players and cellphones and finally web-service knowhow from companies like Google and Facebook. In only three years they grew from a garage to 200 employees, raised money with undisclosed amounts but estimated around 80 million dollars.
I bet there was, and still is many European startup teams who think they could have built the same technology and maybe even had the same idea. But guess who the global consumers heard of?
*Nest was acquired by Alphabet (then called Google) for $3.2 billion in 2014.