On a day when a massive round of layoffs at Nokia has just been announced, we think it’s appropriate to lay out the case for our commitment to investments in the Nordic region.
We use the term Nordic rather than Scandinavia because traditionally Finland is not considered Scandinavian, even though there is a sizable minority of Finns with Swedish names like Mårten Mickos who speak Swedish bilingually with Finnish. Further muddying the waters is the Baltic country Estonia, which shares cultural and linguistic links with Finland, and is sometimes included in the Nordic club. It also doesn’t hurt that’s its capital Tallinn is only 90 minutes by ferry from Helsinki.
Our friends at Creandum have previously done an interesting data-driven analysis on the performance of the Nordic region and the punchline is this: with a combined population of only 25m out of a European population exceeding 850m, Nordic startups produce about a third of the billion dollar exits in Europe and nearly a tenth of the billion dollar exits worldwide (measured from 2005-9).
Attending the Arctic15 event last week in Helsinki I was struck by how much of a global aspiration the teams had (both inside and outside of the conference) and how unique each of their offerings were. Far from the Silicon Valley caricature of Europe as a clone-factory, Nordic startups think big. Their ability to execute the sales and marketing plan to match the inventiveness of their value proposition and design may be still be a work in progress, but they have ambition. This is a strength forged out of a weakness: a tiny home market. Nordic entrepreneurs know that being the #1 clone of Hot Imported Business Model of the Month in Norway is not going to make anything meaningful. Even being the pan-Nordic category winner may not be enough. Nordic entrepreneurs take on huge entrenched foreign competitors and industries like the telecommuncations industry, the music industry and the enterprise software industry and they often win.
We’re proud to count Neo Technology as FGPE’s first marker in the Nordic region. Neo’s roots and R&D team are in Sweden, even if rockstar founder Emil Eifrem is now based in Menlo Park. Mårten and the team at MySQL already did the region proud taking on Oracle’s closed source RDBMS software model with an open-source RDBMS alternative, winning over a huge amount of the last generation’s web 1.0 businesses. Of course, MySQL’s billion dollar exit to Sun led eventually to being part of Oracle, but in the NOSQL race things might well turn out different. Just like in the last generation, web businesses have led the use of innovative database technologies like Neo4j, MongoDB and the rest. Interestingly, Marc Andreessen was quoted yesterday that not a single one of his firm‘s portfolio companies use Oracle. Not one. Oracle has lost the web, and now NOSQL startups are gunning for the enterprise.
And about those Nokia layoffs: it wouldn’t surprise me in the least if some of those 3500 departing (or the ones that may jump before they are pushed) harbor aspirations for greatness of their own. We can’t wait to meet them.