Northern Europe is known for being one of the most efficient regions in the world at producing billion dollar companies. What lies behind their success and how do they see the nearby future?
We tried to pry open their secret chests of knowledge, in search of an answer. Without further adieu, here are the 15 lessons from the region that we gathered from the 15 tracks at the Arctic15 conference in Helsinki this year:
AI Applications Is What Most Of Investors Are Looking For
According to the insights we received from our matchmaking tool Deal Room, AI in marketing & communication is the most exciting field for investors in 2018. Startups that build AI tools to optimize marketing and growth, especially for predictive modelling and segmentation appeared to be one of the most sought-after companies in the Deal Room. Another hot trend in AI and marketing is smart voice-guided user interfaces. The speakers from AI & Data track confirmed Gary Vee’s prediction – in the future, you are likely to move away from screens towards virtual assistants and smart devices. Companies that build analytics software for voice and audio are surfing the big wave.
The Future Is Distributed
The distributed ledger mania is taking over the world. The amount of new blockchain applications shows just how international and multifaceted the approaches to this technology can be. In China, for example, a large number of mainstream financial institutions integrate blockchain technology into their systems. In the US, blockchain goes directly to consumers, impacting the gaming industry with games like with Cryptokitties. The Nordics are at the forefront of exploring the idea of digital cash. The use of cash decreases in the region, therefore banks are looking at possibilities of introducing plastic cards or payment mobile apps for crypto. With overall hype, investors are looking at blockchain applications too, although for many it is still an untapped territory.
Corporate Can Learn To Work As Startups
No longer can startups and corporates be seen as coming from different planets. On the contrary, the tendency is one of increased cooperation and the ability to learn from each other. While corporates want to have access to new technology and innovation, startups strive to get access to funding and new clients. The key is to remember that it is all about personal motivation and willingness to build new relationships. Innovation is a team effort. It is important to invest in people, to have a strong team behind the execution, and to make sure they are focused and know why they do what they do.
Your Market Is One Person
According to hustler-in-chief Gary Vaynerchuk, attention is the only currency in 2018. With that in mind, crafting your marketing and communication strategy is no longer a game of scale. It is a trust and influence based one. Thus companies need to focus on providing intimate value, with an effective “market of one”. A thing all Customer First track speakers unanimously acknowledged – the companies to thrive in the future will be those that understand their customer and have them as the beating heart of their businesses.
Banks Are Becoming Platforms
For many, financial services and banking are the ones and the same. That might have been the case up until a few years ago, but that scenario has now changed. Other players, especially startups, are coming to the scene and making us rethink that old assumption, leading to an interesting case. While corporate banking is not going to disappear, it will have to adapt to become more agile and customer-centred, and this adaptation is now coming from the collaboration with startups. It is still too early to say what the future of financial services will look like, but it seems to be going in the direction of more diversity, inclusion and accessibility.
Organisms Are Algorithms
A few topics seem to play with our imaginations more than health whenever we try to think about the future. How will our bodies be like? Will it be possible to live forever? As far away as these things might sound, the work is already underway. Arctic15 Health program demonstrated that cybersecurity and the current failed model of clinical trials are one of the biggest concerns in healthtech realm. The solution will come from collaboration between various actors – startups, companies and the public sector. Some of the hottest trends in healthtech are wearables, genetic testing, preventive healthcare, and biohacking.
Take Money From New VC’s
The Limited Partner track at Arctic15 revealed two new tendencies in the VC world: a lot more VC money will flood the market and a lot more new VC funds will be born in the near future. Whether that is a good or a bad thing for entrepreneurship remains to be seen. The VC world does not rest on its laurels. According to the track data – the old belief of “once a TOP VC, always a TOP VC” is changing. New VC funds with radical approaches are beginning to outperform old players, which means – you should not only look for the best and established ones anymore – but for those that only just started too. Overall, the VC market is strong, as it has been outperforming the S&P 500, and delivering double-digit returns across the board. So, we can only expect to see more developments there.
Buildings Are Getting Smart
On average, we’re spending about 90% of our times in buildings. As devices become smarter and more connected, one can start to imagine buildings acquiring a life of their own and performing automatically many of the tasks we currently have to do manually. Even more, they just might make it more efficiently than we do, especially from the energy consumption standpoint. From smart sensors to building strategies to devices, the buildings of the future are wired with IoT in ways to make our lives easier and more sustainable. Finland’s largest energy companies, Helen powers more than 400.000 customers with the energy to power up their homes and businesses. Being one of the leaders in the field, the company is moving towards clever solutions for building management and operations.
The Bigger You Get, The Fewer Rules You Should Have
The big takeaway from the scale-ups, came from Ilkka Paananen, CEO of Supercell, who hypothesized that the bigger your company gets, the fewer rules and structure you should have.
This is a counter-intuitive advice from pretty much anything else out there, but the logic against rules can hardly be argued against: “If you hire the best people why do you then need to control them? Hire the best people. Make the best possible teams. Trust these teams.”
Once you do, one of the hardest parts of scaling is to keep focus, as with larger organization the temptation is often to do more, scale more, go to more markets, do more things – and that, according to Ilkka Paananen, could be a recipe for disaster.
Smart Cities = Holistic Communities
The urban population is growing rapidly and already more than half of the world’s population is made up of city dwellers. That makes the structure of the cities a crucial matter for our quality of life since it determines how we live, work and interact with others. It is in the building of such architectures that technology can show its best side, improving the living conditions of many and increasing access to services and democratic participation. This is not a task to be done just by the government, though, as the speakers for this track showed. What is needed, in fact, is the collaboration between public agents, companies, startups and citizens.
The citizens of Tuusula transform their city through new connected development projects and public hackathons. Is there anything in your city that you would like to improve? Join the Cityhack Power People in August.
Space Data Is The New Oil
In 2018 space is no longer terra incognita for startups, investors and larger companies. It is a great source of data and an enormous field for innovation. Big industrial companies already use space technology and data to improve their offering and get more insights about their field. A good example of such use is Rolls Royce collaboration with European Space Agency where the former uses integrated satellite-based connectivity services to test and validate autonomous and remote-controlled ships. Besides the marine industry, the European Space Agency invests heavily in space applications in forestry, health, agriculture, water management, and more. The Agency also works with startups offering zero-equity funding and access to networks and information, dedicated project management support for commercial and technical development.
Have you thought of how to apply space technology in your field? Try it, the results might be mesmerising!
You Are Not Choosing The Talent. The Talent Chooses You.
This is a fact that many are starting to realize, and leaders in the field, such as Google, are realizing that. If you do not have a WHY in your company if you do not know your MEANING, your employees will leave. According to research shown at Arctic15 Talent & Mindset track – nothing can keep best performers in a job – except “meaningful work”. This was further collaborated that by Alok Kumar from SRKay, who showed evidence that although most people still look for money as their first priority – they were the least happy group in the studies. While the happiest were those who had a passion/mission/meaning in life.
So, to prepare for a future economy where equity and wages will transpose through cryptocurrency, and where employees will all start thinking like owners, what will you do within your organization today?
XR Goes Beyond Entertainment
Virtual and augmented realities are some of the hottest topics in the Nordics right now. We got the investor take on the many possibilities and use cases these technologies can have and how they might change the very way we perceive the world around us. Whether it is through gaming, infotainment, surgery training or apps to deal with mental health issues, the lines defining what is “reality” are certainly becoming more blurred by the day.
Food Gets Innovative Upgrades
Did you think that traditional industries such as food would be safe from technological development? Think again! Everything, from the what we eat to the way food is grown, processed, packaged, distributed and cooked, is up to disruption. Large food companies are getting more active in their collaboration with startups, working together on new products and services. Many large companies are moving towards integrated services, such a online commerce and logistics to stand out in the market and win consumer trust.
Startup Competitions Are For Rock Stars, True Entrepreneurs Choose Deals Over Hype
This year we moved away from startup rockstar mentality. Winning a startup competition may bring attention, but often the success is evanescent. To ensure long terms value we introduced the Funding Program. In the Program, our Top 15 startups got the chance to present and close, on stage, deals with investors. Screenful, which developed a tool to compile data from different apps and display them together in order to improve team performance by compiling data from different existing tools and displaying them together to track project progress, was crowned as the first-ever startup to get funding in the Program.
Photos by Saara Autere
Arctic15 2018 would not have been possible without your active participation. Thank you all for joining us at the event. A special thanks go to our partners, whose contribution made these insights available for you.
See you again next year for Arctic15 2019!