f inland and the helsinki spring 090811
TRANSCRIPT
Finland, Public Policy and the Helsinki Spring
Steve Blank
www.steveblank.com
Twitter: sgblank
Slides: www.slideshare.net/sblank
Corporate Lifecycle, Innovation, Startups, Founders, Ecosystem
Corporate Lifecycle, Innovation, Startups,
Founders, Ecosystem
Why Should I Care?
Why Start New Companies in Finland?
Because Old Ones Die
Corporate Lifecyclesare Getting Shorter
Disruption
Disruption
Technology, Globalization, Regulation, Consumer Taste,
Competition, etc.
Job Growth From Existing Companies will Decline
Job Growth Will Come From New Companies
Job Growth Will Come From New Companies
Startups
Entrepreneurs are Coming to Finland to Start Companies
Entrepreneurs are Coming to Finland to Start Companies
Helsinki Spring
First -What’s A Startup?
Six Types of Startups
Startup
Lifestyle Startups Work to Live their Passion
• Serve known customer with known product
• Get paid for their passion
Small BusinessStartup
Small Business StartupsWork to Feed the Family
• Serve known customer with known product
• Feed the family
Small BusinessStartup
Exit Criteria- Business Model found
- Profitable business- Existing team
< €100K in revenue
Small Business StartupsWork to Feed the Family
• known customer known product
• Feed the family
ScalableStartup
Large Company
Scalable StartupBorn to Be Big
Goal is to solve for:
unknown customer and unknown features
Search
ScalableStartup
Large Company
Exit Criteria- Business model found- Total Available Market > €300m- Can grow to €50/year
Scalable StartupBorn to Be Big
Search Execute
ScalableStartup
Large Company
Scalable StartupBorn to Be Big
• A scalable startup is designed to grow big• Needs “Risk capital”• What Silicon Valley means when they say “Startup”
Search Execute
ScalableStartup
€3 to 30M Acquisition
Buyable StartupBorn to Be Sold
Goal is to solve for:
Internet, Mobile, Gaming Apps
Search Sell
ScalableStartup
€3 to e0M Acquisition
Buyable Startup
Goal is to solve for:
Internet and Mobile Apps
Search Sell
Sell to larger company
Transition Large Company
ScalableStartup
Sustaining Innovation
• Existing Market / Known
customer• Known product feature needs
Large Company Sustaining InnovationInnovate or Evaporate
Large Company
Sustaining Innovation
Large Company Sustaining InnovationInnovate or Evaporate
• Build• Partner• Acquire
- IP - Talent
- Product
- Customers
- Business
TransitionScalableStartup
Large Company Disruptive Innovation
New Division
Large Company
Disruptive Innovation• New Market• New tech, customers, channels
Transition
Large Company Disruptive Innovation
New Division
Large Company
Disruptive Innovation• Build• Partner• Acquire
- IP - Talent
- Product
- Customers
- Business
Transition
Large Non-Profit
Social Startup
Social Entrepreneurship Startups
• Solve pressing social problems
• Social Enterprise: Profitable
• Social Innovation: New Strategies
Each of these startups require different skills
They Can Not Be Taught the Same Way
Each of these startups require different
Government Policies
They Can Not Be Built the Same Way
Scalable Startups Will Provide the Highest Job Growth
Scalable Startups Will Provide the Highest Job Growth
They Require an Ecosystem You Do Not Have
Entrepreneurs
Scalable Startup Ecosystem
• Take risk• No funding• Building product• Thinking through business model
Incubators
Entrepreneurs
Scalable Startup Ecosystem
• skills training • mentoring = experience• networking• shared office• small funding ~ €30K• limited time ~ 6 months
Incubators
Angel Funds Entrepreneurs
Scalable Startup Ecosystem
• it’s now a company• searching for a business model• limited funding ~ €300K• mentoring
Incubators
Venture Capital Funds Entrepreneurs
Scalable Startup Ecosystem
• Large funding > €2000K• Found a business Model• Scale• Multiple rounds of money• Startup Experience outside of Finland
Startup Ecosystem Challenges
• Current policies in:- Capital Gains- Investment Incentives- Immigration
• Cultural view of Risk and Failure
All actively discourage Scalable Startups
Startup Ecosystem Challenges
• Government VC´s, Tekes officials and Incubators are paid by salary and consulting
• Consultants are paid with Tekes money- Few are willing to change or criticize
• All are on the wrong incentive system- Equity not cash
• Missing experienced startup entrepreneurs- Tekes, incubators, VC’s, etc.
Each of These Steps Must Require Risk
Each of These Steps Must Require Risk
For the Entrepreneur and For the Investor
Public Funding of Private Capital Does Not Work
Public Funding of Private Capital Does Not Work
Each Party Needs to Have Equal Risk
The Goal of Public Funding Should be to Create a Private Capital Ecosystem
The Goal of Public Funding Should be to Create a Private Capital Ecosystem
Fund and attract experienced Incubators & Venture Capital
Challenge
What Is the One Vision of Sitra, Tekes, Aalto, Finnish Technology Industries?
Find It and Put Public Funding for Innovation Out of Business
Thank You