startups

Today, just a few minutes ago, I was speaking at the AaltoES Startup Sauna kickoff event.

Here are my slides as a PDF from that event:

Small filesize version here. (1 meg)

Large filesize (over 60MB, very high res images you see...) version here.

As always, all feedback is much welcomed!

Today me and Lasse Männistö published a finnish language proposal about renewing the growth company / startup financing in Finland.

As any experienced startup entrepreneur in Finland knows; the state is heavily involved in giving grants and loans etc various kind of direct and indirect support to companies. All together there are about 100 different instances, giving out over 1000 separate instruments of support, that total over 2 billion EUR annually. This is quite complex and quite confusing.

One interesting stat from the "support jungle" is that there are approximately 4-5 thousand government officials involved in this machinery (by a wide definition) - and arguably Finland has less than 4-5 thousand strong growth companies; so in essence we have a system that has more than one person working it for each growth company we have.. Doesn't sound very efficient, now does it?

Our finnish language proposal can be downloaded from here.

And the associated press release from here.

What we are proposing is just a good start - something to get things moving. Naturally there would be more action following these initial steps. We formulated our proposal to be politically easy to accept and realistic. It is designed as an expense neutral program: meaning that it would not increase government expenditure; in fact there's a rather high chance that it would produce money instead of drain it.

In brief, we propose:

1) Tax breaks for innovative R&D activities. Finland is just about the only western country in the world that doesn't use these kind of tax breaks. Even Germany started using them recently. Many others like Norway and the Netherlands use them extensively and with very good results.

2) Incentives for angel funding and other seed funding. This kind of model has been successfully implemented by Singapore, Israel and to some extent (with very heavy tax breaks) by Canada as well. We would need incentives for business angels, and for grass roots level funding from the groundswell. The state needs to get into market driven asymmetric funds and let commercial free market mechanisms decide what kind of innovations to fund - encourage growth by other means than government official decisions.

3) The support jungle machinery needs a reform. It is too inefficient and too massive for its own good = there are not enough good results coming out of it per cost of running it.

The job creating power of startups is amazing; when it comes to new jobs they are not the major thing; they are pretty much the ONLY thing. They drive job creation and growth more than anything else out there. They drive prosperity and wealth. We don't need another monolithic Nokia in Finland; we need a thousand Angry Birds and a lot of things we can't even predict yet - that will raise up from the mists of creation to conquer the world!

If you agree with this proposal; expand on it, champion it, talk about it to political decision makers and make noise about it in general! With the elections at our doorstep there is a genuine chance to get positive things done in this very vital and important field as well!

I'm also very interested to hear how the proposal could be even better?

Edit (20.3.2011 18:48) Petteri Koponen has good commentary on this, here:

http://serialtrier.wordpress.com/2011/03/20/on-improving-finlands-startu...

Here's a short list of upcoming evens you can find me in.

First of all the event I blogged about previously in here, got moved to a new date; 4th of Novermber 2010. So far we have managed to secure some amazing speakers; Andreas Ehn (Spotify, Stardoll, currently at his new stealth startup), Timo Soininen (Sulake), and Andreas von Koskull (Mr. Goodliving, Sauma). The event will be at Korjaamo in Helsinki. You can sign up through this link here. The event is part of the IBP programme and is financed by the EU through ESR.

20.9.2010 I will be on the FInnish Internet Forum, at the parliament building, speaking for a brief while and then as a panel member. This event is also streamed to the interwebz so you can watch it from your own couch.

30.9.2010 I will be a speaker and a panelist at an event called "Vuoden Veemäisin Yrittäjätapahtuma", part II. Finnish language program only, click the link for details and signup. Other speakers will be the country manager of Microsoft Finland, Google Finland's head of industry Ari Ojansivu, and sales director Kimmo Laaksonen from Elisa. The topic is a really juicy interesting one: Ethics and morality.

5.10.2010 WIll be speaking in Tampere at the local entrepreneurship association's event. About social media and digital marketing. Other speakers from various companies.

6.10.2010 I'll be at MindTrek in Tampere, and also running a full day "IBP Camp" training session at Demola. Details are here. I'll be co-running it together with Prof (emer) Reijo Luostarinen, for a full 8 hours straight. It's likely to be in finnish, but if some english-only participants sign up, then the language will switch. The topic is really interesting: how to design your company's strategy and operations for success? How's all that done? What to consider? etc.

7.10.2010 I'll be at MindTrek proper; as a one of the panelists/judges for the MindTrek launchpad.

8.10.2010 There's a Noridc Open event in Tallin, Estonia. I'll be speaking in the afternoon programme and as a panelist later on.

12.10.2010 I'll be speaking at HMEA's Entrepreneur Tuesday event. In Espoo.

13.10.2010 There's an IBP pitching clinic for internationally aspiring companies; to pitch and win a 18K EUR funding package and close up support for the UK market. Details and signup are here. Other pitching panelists include Mr. Steve Smith from Software City, UK, and Mikko-Jussi Suonenlahti from Veraventure.

14.10.2010 There's an entrepreneur event for women in Joensuu, organized by Nordea Bank. I'll be one of the keynote speakers. Will probably be there with Google's country manager, Anni.

21.10.2010 Itella is organizing an e-commerce event in Helsinki. I'll be the main outside key note speaker there. This is an invite-only event I think.. (ask me if you think you could benefit from an invite).

2.11.2010 e-learning centre of Finland is organizing an event in Vanajanlinna. I'll be the key note speakers for the day there. Programme & signup here.

4.11.2010 is the first mentioned event with very good key note speakers - be there!

12.11.2010 I'll be briefly introducing a topic for discussion at Tieke's breakfast event.

18.11.2010 Marketing Talks -event by Metropolia polytechnic. I'll be speaking to students about tech entrepreneurship.

... hmm that's quite a few events and such for this fall. Be in touch if I can help you with any info regarding any of the events. Hope to see you in some of them!

I am organizing a 1 day event together with Accelerando, as part of the IBP project for all companies in digital businesses.

It will take place on the 23rd of September 2010 (thursday). Somewhere in Helsinki.

The event is targeted for growth companies who are perhaps already international, or currently seeking to get there. Some are startups, some are more than 10 year old established companies that seek to enter new markets and expand their business. There's a whole big list of companies that have claimed to belong to this group, here.

There's a questionnaire up behind this link. I urge you to take it (just a few questions, very quick) - its purpose is to help us plan the best kind of event for you. Possibly getting in international speakers etc, tailoring the program to your most urgent business needs.

I invite you to participate now! Go through the questionnaire and contribute your ideas, views and hot topics. The budget for this is humble, but there's still tons of options to get things organized; so feel free to aim big and really "vent" what you would like to see & hear about the most.

Since the Slush'09 event I have been touring with the IBP (International Business Program) across Finland, listening to startups, coaching, giving feedback and trying to give a few ideas on how to get things going. This has been interesting to me, as I am not a consultant, but an entrepreneur by class and nature. Usually I work with a few chosen companies, typically as an owner, board member, advisor etc. I have 10 successful funding rounds and several exists behind me so I know a thing or two about pitching, presenting and shaping a company to be interesting and successful. Semi-frequently I also get asked to act as a judge in a pitching competition, I'm up there presenting and talking myself about once every two weeks nowdays. So, it's been good fun with the IBP!

The project describes its own goal as : "International Business Program is offering help for digital business companies which have proved to be growth willing and estimated to have potential global competitiveness."

In essence; we try to make promising companies sprout, grow and be more internationally successful.

We have been touring Helsinki, Hämeenlinna, Kouvola, Tampere and Vaasa. The whole program has been free for the companies (sponsored by public ESR funding) and the format has been quite effective varied format: pitches, feedback, Q&A, written analysis from experts, one-on-one coaching, and plenty of good talks. It's not necessary to be a startup to participate, tho many have been clear startup cases, some even pre-incorporated ideas. While others have been actual corporations and well-established companies.

All together we'v had 33 companies participating so far. Here's my list:

Siltaloppi Productions - Videoarkisto.fi
Fitness Media (Maximal.tv)
Elixir
JoinMeTube
Advant Games
Citynomadi
KLOK
Steam Republic
XMLdation.com
Kutalab (djonline.fi)
Wavesum
Solver
Pallo.com (in stealth mode, therefor no link)
CTS Engtec
Jalusta Technologies / Aptual
TWID
Simosol, Ltd
Mediamaisteri
IT-Palvelu.net
Mikrolinna
Webbinetti S&T Ky (kaitafilmi.fi)
Viestix, Ltd (Breeze Tags)
SongHI Entertainment
Red Tail
Rolohub
Zokem
Floobs
Illtags
Ball-IT
BRIIM
Futuuns
Fambit
Aito Technologies

We also had a bunch that joined up, but bailed out for some reason or the other ;-)

I have been there throughout all the sessions and have listened to each of those companies pitch, given them all feedback, and written them some notes. There have been a few other established industry people doing the same. Namely the crew of Accelerando. and Timoteus Tuovinen from DOORStories.

After hearing 33 companies pitch (and naturally bunch of others outside this program as well) it becomes quite apparent what we need to focus more on here in Finland. One of the main points in illustrated here in this picture:

Which candy is the most delicious? The best thing, based on solid Finnish technology? Can't say huh?

Often enough neither can I.. This repeated quite a few times in the pitches and presentations of our companies: not really paying enough attention to differentiation, competition, competitive response and uniqueness..

If all the competitors in your market are like bridesmaids dressed up in their pretty black dresses. Then your startup simply HAS TO BE the gorgeous white bride that clearly stands out from the crowd.

Sounds simple enough? Differentiation, uniqueness and standing out clearly from your competition is one of the most essential things any company should have figured out. Also when you pitch your company it should be one of the first things you illustrate. Illustration can happen (or should happen) through captivating action; like showing the audience a demo of your product etc. It is OK to say it, but even better to show it; how much you differentiate from your competition.

In 2008 Jason Calacanis wrote these two (first here, second here) excellent posts about presenting and "how to demo your startup". Read them. Study them religiously. Take them seriously and act on them. This is amongst the best advice I have seen out there.

Differentiation for a startup is more important than things like relevance or price. It's more important than your revenue model. Get it figured out first and worry about the revenue model later.

I also like two kinds of companies: those that pick an opponent and go and pick a fight, and those that just ignore all the competition and mold themselves to be so different from anybody else that they just about create a category of their own; they go their own way.

If you have longer than a few minutes to demo or pitch your startup (some of the 33 companies there had a full 30 minutes), then you can go a bit deeper and use a structure like the one here by Sequoia Capital. It is also simultaneously one of the best structures to follow as your business plan slide deck.

Many companies I heard pitches from have excellent products, existing customers, many references and showcases on the market. But did they show them? Almost universally; NO. only very rarely did anybody show us any proper real cases and executed references at all.

One of the best things you can show in a pitch is a real demo of your product. Engage the audience with a story, a real showcase, show them a reference, talk about what you did for that customer, how valuable it is, and how it's different from the ability of your competition to deliver the same amazing value. You should do this as the first thing of your presentation (you should start with this) the rest is much more interesting if this first part arouses the interest of the audience.

What's the worst kind of presentation then? Here's a small list:

- Starting with your name, title and industry background (usually everybody in the audience can read; and they have been reading some preparatory material already and know your name for example).
- Going through the general market first and not even mentioning what it is that you do (general market is only interesting if the product is).
- Using only bulletpoint slides, preferably in black and white (boring everybody to death)
- Not showing your excellent product, despite the fact that you do have it
- Speaking only technical stuff and ignoring the minor things such as competition, differentiation, customer value, and revenue model... etc

A 17 part list of good pitching.

The opposite of this is an engaging exciting presentation that goes right to the point and really leaves the audience reeling from sheer awesomeness of it. What could it include then?

1. Start with a real demo or real reference case, show your product
2. Immediately explain what we see, how awesome and easy it is
3. Followup by what value it creates (problem it solves), how vital it is to the customer (how well it solves it)
4. Go into differentiation; show a few key competitors and explain why you are superiorly unique to them
5. Head into how much money you make and how
6. Next only one or two sentences about the market opportunity (why this is hot now?)
7. Showcase your excellent team in a memorable way
8. Throw in all the awesome customer references and wins you have accomplished. Show pictures, video or live demos of each quickly
9. Do the grande finale with a call to action: do you seek funding? customers? partners? state it!

In a short pitch my opinion is that you should totally ignore these:

10. No long introductions of yourself and your work history, plz. (it may be interesting that you are a paramedic by training, but it's certainly more interesting after you tell us about your amazing company first)
11. Explaining the history and evolution of the market (forget it, no time)
12. Financials (boring, forget it. If they like your company, they will ask and talk about the finances later on.)
13. Technical stuff about the product (unless its globally patented and very very cool like an anti-gravity machine, forget it. It doesn't matter how exactly it works underneath, it only matters what you use it for).

Besides the content, what else should you concentrate on?

14. Good open and exciting body language. Move around, engage the audience, make it SHOW that you are excited about the opportunities of your company!
15. maintain a good contact with the audience: have constant eye contact. Don't stand behind a podium or a laptop. Always use a wireless presenter when pitching so that you don't have to be there to push keyboard buttons.
16. Answers all questions after the pitch in a short efficient and honest manner. Challenge the people asking them: ask for justifications, more details and examples of what they really mean etc. Engage them in an intelligent rapid-fire conversation
17. Make your presentation materials very visual. All pictures and video and live demos would be the best. No text (except single words or a few words at the maximum) and absolutely NO bullet points and boring slides. A decent tool to use for this would be www.prezi.com

.. OK enough about pitching. What else did I learn from ICP clinics?

We have great companies and great products here in Finland. We need to be much much better in presenting them. We also need to think about differentiation, uniqueness, competition and summarizing it all much more. Growth potential is there, we just need to shape it out!

If this post has managed to grasp your attention and you want in; good news! That can be done. There will be a full day IBP camps coming up that you and your company can join:

IBP Camp Helsinki: 20.4.2010 (topic: internationalization and funding)
IBP Camp Hämeenlinna: 7.5.2010 (topic: partnerships and networks)
IBP Camp Tampere: 6.10.2010
IBP Camp in UK September/2010

The camps cost a negligible sum each (200 EUR + VAT) and there's room for only 20 companies: so joint up now! (there's a link below)

There are also more up and coming clinics (these pitching and coaching sessions):

Clinic Tampere 17.-18.5.
Clinic Helsinki 8-9.9.
Clinic Vaasa 23.9.

There's also a full GoToMarket package that you can apply for; the best companies get it. That means very competent people to help you out for a strongly supported fee (ESR public funding up to 75% and 10.000 EUR)

You can apply to all of those through this form here.

Don't be tied up with your digibusiness! Join us and we'll tackle the challenges you have together. I hope that the links and lists on this blog post would be a good start to take your company further.

Godspeed!