When ArcticStartup got started towards the end of 2007, we set out originally to cover Finnish startups and technology focused growth companies. In just 6 months we realised that the market is too small to sustain coverage and potential business. Therefore in early 2008 we expanded our reach to cover Nordics and Baltics, which back then seemed like an overly bold thing to do.
However, that move has probably been the smartest strategic decision our company has ever taken. The reason is quite simple to be honest. The Nordics and Baltics create a big enough region that makes sense to cover for a few good reasons.
Firstly, and perhaps most importantly, any of the Nordic or Baltic countries by themselves are too small to be noticed by international investors to such a degree that would fuel significant interest (and later, investments) into the countries.
Secondly, each of the countries have a very similar starting point regarding entrepreneurship and visibility: they are all small and have a funny local language that very few people are able to understand.
The second points creates the challenge that foreigners trying to observe the market have no way of doing so, unless they work through local consultants for example. This was the challenge against which we positioned ArcticStartup.
These points and exclusively writing about Nordic and Baltic companies, have enabled us to create enough value for our readers continuously so that today we are read by more than 70 000 people monthly, from all over the world.
On a Nordic and Baltic level, our nations are in the same situation we were in 2007-2008. They try to accomplish everything by themselves through local efforts, failing to see the bigger picture that could help build value across borders.
Last Friday, Finnish Prime Minister Jyrki Katainen took part in a panel discussion organised by Fiban, the Finnish Business Angel Network, where he said that instead of trying to set aside tax payer money for more growth funding (something that is lacking in Finland currently) we should look to create a situation were foreigners come to Finland to seize those opportunities.
In the midst of all the Grexits and austerity, I believe it was one of the smartest things I’ve heard from a politician in the recent months.
Just yesterday, Finnish Industry Investment announced that it has commited €7.5 million into Creandum’s new fund in Sweden. This is a great sign that should be noted wide and far in other pension funds not only in Finland, but elsewhere in the region as well.
These are just two quick, good examples on how the region should begin to work together more closely to truly help the growing companies that fuel our economies and welfare.
If pension funds’ rules prevent them from investing into foreign Venture Capital funds, those rules should be changed.
The countries in the region should work together in a more organised fashion to help create a large enough domestic market not only for startups, but also for investors. Having Finland setup its own growth fund that is fueled by tax payer money does not make sense at all. Nor does it really make sense in any other country in the region either.
However, if all the countries supported efforts in the private market that independent investors take – we could just have a chance at changing things for good.
Startups are already learning to network and reap the benefits across borders, traveling to the events like Latitude59 in Tallinn next month or to one of our ArcticEvenings. We should expect nothing, but the same from politicians and policies regarding entrepreneurship.