Our coverage of Liilak about a month ago provides a good picture of the idea crowdsourcing service, but after talking to CEO Jarkko Jokirinta as part of a series of posts on behalf of Tekes, we learned more about the next layer they’re placing on top of that service. “We aim to be the de facto link between people and businesses all around the world,” says Jokirinta. “When anyone has a praise or an idea about a product they use every day or business they somehow are in connection with, all they need to do is open Liilak and share their thoughts.”
In this way, they’re moving towards more of a combination of Twitter, Foursquare, and a feedback system. Through each other’s praises and by following other people and their suggestions Liilak allows people to learn what is buzzing. “We empower the crowd to think of better ways of doing things and create enough buzz to get the Businesses to listen.”
So if a person makes an improvement suggestion on Liilak, anyone can praise the idea and thus show his support for it. The praises are then calculated on a specific Shoutbox page that is always automatically created for each object with ideas or praises. We make sure the information is categorized, goes to right place and that the great ideas can collect other people’s support behind them. The catch is that Liilak also makes a promise that if an idea is able to gather at least 100 praises, it will then be delivered to the related Business. “So from now on, people don’t have to register on dozens of company sites and hope to get their suggestions through. We do it for them.”
CEO Jarkko Jokirinta has been a part of a few Tekes projects, so he was able to share with us some of his experiences on the process Tekes uses to fund entrepreneurs.
As the saying goes, “you need money to make money”
..And applying to Tekes doesn’t give you any exemptions. Tekes’ model can be likened to more of a repayment system rather than a source of up-front cash. Because of this, you need to have some private funding, whether it’s some of your own money or an investment from a Business Angel to keep yourself afloat until Tekes redeems your receipts. Jokirinta tells us that this amount is usually dependent on your project’s size and costs:
“Usually this means either a contribution on a 50/50 grant, or a loan on 30/70 split.” Most startups are offered the 50/50 grant, as the loans are often offered to more established companies that are closer to market. But this 50/50 grant is often used for startups, and it allows you to essentially double the funding you have and apply it to salaries, material costs, travel, and so on.
But according to Jokirinta, “the biggest challenge for a startup is to collect this 50% private funding that entitles them to receive any Tekes money.”
The Process
Saving receipts and recording expenses sounds like a pain, but Jokirinta says it’s not too difficult in practice. He recommends coming up with a suitable model with your accountant, and says it’s normal to establish a specific cost center with the project
“In practice one usually keeps track of receipts and invoices by giving a specific reference number to any invoice / cost related to Tekes,” says Jokirinta, “Naturally there’s some work in the end of the project when one, together with the accountants, needs to go through the entire Tekes accounting to make sure everything’s ok.”
Tips
“I guess the best tip with the current Tekes model is to be as proactive as possible. As a startup, I’d make sure I have a sufficient amount of private equity when applying money from Tekes. They usually also can give you very detailed and helpful information regarding what should be included in the application and project plan if one just asks. If one wishes to make the acceptance process faster I’d would highly recommend being active on contacting Tekes by yourself immediately after one has filed in the application to agree on a initial meeting.
“I want to emphasize that I’ve learned Tekes people to be really helpful if you just are active and ask them about issues. I want to thank Tekes people and our contact persons for this and also encourage startups to be proactive in this sense.”
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Hear it from startups
This series of posts is sponsored by Tekes and produced in co-operation with ArcticStartup to share experiences from startups about their funding experiences.
Interested in the fast turnaround of Tekes Tempo?
Find contact details, information on the program, and how to apply on their about page.
