An Outsider's Take On Finnish Startups

    We invited Peter Robinett of Bubble Foundry to come and attend Slush on behalf of TheNextWeb blog, an Amsterdam based weblog that reports on everything that influences the future of the Web, in any way. Peter himself is a developer now living in Amsterdam and very active in the local startup scene. Peter for example organizes Lunch 2.0 and Mobile Dev Camp in Amsterdam. Here’s Peter’s take on the Finnish startup scene.

    I had a great time attending Slush on Monday and Ville asked me to share my thoughts of the Helsinki startup scene. While more directed at ArcticStartup’s Finnish readers, I hope these comments proven interesting to all ArcticStartup readers. My experience with startups is mainly through working with Dutch ones and organizing various events in the Netherlands, though having grown up in Silicon Valley I hope I have a somewhat accurate sense of how things work there too.

    The Financial Climate

    While there seemed to be widespread contentment with Finnish angel investors, it seemed no one in Helsinki has a kind word for local venture capital companies. Most of the discontent stems from the unavoidable fact that almost all Finnish venture funds are very small. Despite this, in comparison to the Netherlands, I think the Finnish environment is a more friendly financial climate. While there are a few more Netherlands venture funds, I don’t know whether you could say that they are any wiser or better capitalized than their Finnish counterparts. In contrast, it’s hugely important that successful Finnish entrepreneurs such as Risto Siilasmaa and Monty Widenius are actively investing in and advising local early-stage startups. I saw good knowledge and comfort with the how the Silicon Valley-style system of startup funding and growth works, which suggests that Finnish startups will be successful in raising venture capital — from my perspective, they already seem remarkably successful.

    Photo by Erik Charlton (CC:BY).

    This is in contrast to the Netherlands, where the knowledge of how to raise venture capital seems to be much rarer. One challenge Dutch entrepreneurs that do understand the system tell me they struggle with is how difficult it is to raise funding in the range of €200.000 to €1M, due to the absence of any local funds or investment groups working in this market. It isn’t clear to me if this is falls into people’s idea of venture funding in Finland, so I can’t say whether Finland also has this problem or it was included with angel investing when people said they were happy with the availability of smaller amounts of captial.

    I think one reason there is this comfort with startup financing, both as entrepreneurs and as investors, is because there have been a reasonable number of quite successful exits. However, I noticed that none of the successful entrepreneurs presenting or otherwise present at Slush had successful IPO’ed. Naturally you can partially attribute this to the tiny Finnish market. However, given the knowledge of the Silicon Valley system and comfort with selling startups to American companies, I am surprised there have not been more, if any, IPOs. While the IPO market is in deep freeze right now, I think it is safe to assume that it will eventually regain at least some of its form activity. The question then is, will or could Finnish startups benefit from IPOing, whether in New York or London?


    Several Finns during Slush declared the aversion to failure in Finnish culture seriously hinders local entrepreneurship. However, as Matt Marshall of VentureBeat suggested, people might be over-emphasizing the acceptance of failure in Silicon Valley. The enthusiasm everyone showed at the conference suggests that most of the Finnish startup scene isn’t afraid of failure — or, if they are, they are very good at hiding it. Of course, a cynic might suggest that the failed entrepreneurs were naturally not at Slush, but I guess only those who know the history of Finnish startups well can say. Can you name any Finnish entrepreneurs who have had spectacular failures and now can’t show their faces at events such as Slush?

    Photo by nick_russill (CC:BY).

    As Ilja Laurs of GetJar noted, successful companies can become either ‘lifestyle companies’ or ‘public companies’. This struck a deep chord with me, as I think this is a fundamental divide in business. For me, if a company is not trying to become a public company, a growth company, is it worth really calling it a startup rather than just calling it a small business? Lots of the startups at Slush were proud to announce they were bootstrapping their businesses but I wonder how many will get stuck in this mode. Startups often have to bootstrap initially but making that transition from a consulting or contracting company to a product company can be very difficult and a company can easily lose its way. It will be interesting to see come next year how many of the bootstrapping companies will have successfully made this transition. Of course, many have argued that the current economy will demand a shift to, not from, consulting in order for businesses to survive.

    One common criticism directed by Finnish entrepreneurs at themselves is that Finns are not good at marketing themselves. Unfortunately, I am afraid that this is not untrue, as I feel it is safe to say that few early-stage Finnish startups are known outside of Finland. Just looking at industry events, there is a mixed record. On one hand, Scred went to Seedcamp and Zipipop was at Mobile 2.0 and will present at LeWeb. On the other hand, in every case the companies were the only ones from Finland present. I think the sauna truck full of Finnish startups going to LeWeb in two weeks is a great piece of guerrilla marketing and hope that this is a sign that Finnish startups are becoming more comfortable with promoting themselves.

    In contrast, I think that Dutch entrepreneurs are more comfortable promoting themselves, particularly overseas. Particular this is due to a more outgoing culture and partially due to slightly better English, though the average level of English in Helsinki is still very high. But it is also simply that Amsterdam is a shorter flight away from London, New York and San Francisco. The Next Web conference and blog also plays a key promotional role for Dutch startups. Several Dutch entrepreneurs told me that they immediately got enthusiastic responses overseas once they told people are from Amsterdam thanks to the profile of The Next Web. Luckily for Finnish startups, ArcticStartup and Slush are starting to play a similar role, so this aspect of the equation is being addressed. Finally, Dutch startups also benefit from the personal connections a surprising many in the Silicon Valley scene have with Amsterdam.


    Several local entrepreneurs told me how important Slush was and how new it was to have an event like it. Being based in Amsterdam and coming from Silicon Valley, perhaps I can offer some more examples and suggestions. First, there’s no alternative to just getting out and seeing people. I can see that this is already happening with Slush and the more regular events ArcticStartup helps organize, such as Open Coffee and ArcticEvening. First of all, I would really encourage you to try to attend as often as possible. Judging from my own experience with OpenCoffee and Lunch 2.0 in Amsterdam, seeing people regularly lets you keep in touch with what other startups are doing and means that everyone is more likely to be in the right place at the right time to strike up fruitful partnerships and deals.

    Photo by Peter Forsgård (CC:BY).

    Speaking of Lunch 2.0, I organize the Dutch version of Lunch 2.0 and think the concept would work really well in Helsinki. It’s simple: a different startup provides free launch to whoever wants to come and you chat. Also, BarCamps and other unconferences are a great way to develop ideas and make new connections both socially and intellectually. I attended the first BarCamp Helsinki last May and had a blast; I hear the second one a few months ago was also a big success. However, with an average attendance of maybe 20 people there’s definitely room for expansion. Support your local BarCamp!

    Finally, I would like to propose a Mobile Dev Camp Helsinki. I’m organizing one in Amsterdam this weekend (see and I think the concept would work really well in Helsinki. There are so many great mobile developers in Finland and I know that several Helsinki startups are starting to explore the mobile world beyond Symbian. Let’s get together in a few months and make some great apps!

    Well, this was a rather long piece, but I hope you enjoyed it. I’d love to hear your comments, either here in the comments or via email at [email protected] Thanks and I hope to see all the great Finnish startups I met again soon in Amsterdam or Helsinki!