When talking about "Innovation," there are a handful of startup capitals that tend to come to mind: Silicon Valley, Seattle, Boston, New York City, Chicago, and more, just in the United States. Globally, you've got Tel Aviv, London, Toronto, Singapore, Sweden, and many others quickly on the rise.
But one that doesn't get as much attention as it probably should, especially on a global level, is the modest capital of Finland that sits on the gulf's peninsula. Housing about 630,000 people (1.4 million in the metro area), Helsinki has already given birth to a handful of explosive companies, such as Rovio, the creators of "Angry Birds" and Supercell, the creators of "Clash of Clans." But the gaming scene that put Helsinki tech on the map is just the tip of the iceberg.
The startup hub is quickly growing its influence in the SaaS and B2B ecosystems with companies like Smartly, Nosto, Wolt and Smarp, to name a few, and proving that it has its sights set on becoming a global leader in tech. Helsinki is also home to the researchers who recently revealed a fascinating study about the relationships entrepreneurs have with their businesses, and how it compares to the feelings a father has for their child.
Especially in the past 10 years, Helsinki, like other European startup hubs and hotspots, has become a breeding ground for innovation. What helps emerging tech and startup hubs like Helsinki is the fact that the government is willing to support new tech companies with grants and loans, which makes the first steps in becoming an entrepreneur quite easy.
The challenge, however, is that markets like Helsinki, for example, are very small--comparatively speaking. You can only scale so far locally, before international expansion becomes essential. And since American and other global markets (and their consumers) behave very differently, scaling from say Finland to Silicon Valley has proven to be a challenge unless that goal was established and worked toward from the beginning.
One Nordic tech entrepreneur who knows this challenge intimately isPekka Koskinen, CEO of Leadfeeder, a sales intelligence tool that uses smart web analytics. In addition to being a founder and investor to B2B SaaS companies in the Finnish/Nordic tech ecosystem, he is also an active influencer and mentor.
Prior to Leadfeeder, he founded an analytics solution company called Snoobi, which he successfully exited in 2012, that won the Rising Star award from Deloitte as the fastest growing technology company in Finland back in 2008.
Curious about how startup scenes operate in other countries, and how these smaller but booming tech hubs are effectively scaling, I asked Koskinen to shed some light on what some of these challenges look like from the inside.
"Helsinki has become a great place to be a startup entrepreneur," he said. "However, what I have noticed is that once the business begins to grow, the limiting market size of Finland forces companies to expand into international markets at a relatively early phase. These other markets don't necessarily behave like the local Finnish market though, so international expansion has proven to be a challenge for many Finnish companies."
This is a problem Koskinen actually ran into himself, Leadfeeder being a startup he's built from day one with the intention of expanding outside of Finnish markets. As he explained it, when he was a first-time entrepreneur (like many others), his aim was to conquer the Finnish market--which he did. But after that first win, he found it difficult to scale the business internationally.
This is an issue that tends to get glossed over during fluffy conversations wherein scaling is discussed. Many startups, and even entire markets and cities, make assumptions (especially in tech) about their local success and how it will inevitably translate globally.
"This time around, I have concentrated heavily on creating a product that not only fits and succeeds in our Finnish market, but in US markets as well," he explained. "That's why all of Leadfeeder's messaging has been primarily in English, and why we sell the product in dollars. And as we move forward, we will employ more people from the US for marketing and sales. I think many entrepreneurs in Finland have similar goals," said Koskinen.
This raises an interesting point about startup culture, specifically as it relates to finding the right city or hub for your concept. So much of the discussion revolves around this idea that the city itself is the final destination--when Helsinki, Finland, is a perfect example of how that's really just the tip of the iceberg. The city you found your company in and where you ultimately operate plays a significant role, of course, but what happens once you've conquered your local market? And more importantly, what are some of the pros and cons that local market can have on your international scaling ability?
"I have always found it important to be involved in the startup scene here. I believe that learning about the tactics that others have used successful is one of the most valuable things company leaders can do," said Koskinen. "Learning about things related specifically to sales and marketing is something Finish entrepreneurs discuss with one another a great deal. But, it's also worth acknowledging that the Finnish startup scene is small, which allows everyone to know and trust each other - but on the other hand, that limits how many fresh new perspectives there are."
So no matter where you choose to settle your company, remember to always keep your ears open to learning from all the other hotspots around the world.