“Profitability is the new black” is how Farley Duvall introduced the White Bull mission at the second of the Tech Entrepreneur Series in Stockholm, this time hosted by legal firm Bird & Bird; I've posted about the inaugural session in Paris previously. While start-ups are important, so too are the later stage tech companies who are generating revenue and even, dare I say it, profit. We like this space too: companies that have a proven business model, a deep understanding of the niche in which they operate and are creating real jobs.
The evening’s panel session, ably chaired by Tony Kypreos from UKTI’s Global Entrepreneurs Programme, touched on the strengths and weaknesses of Swedish entrepreneurs and the ecosystem they inhabit. The consensus was that entrepreneurship is now considered sexy in Sweden with high profile enjoyed by role models such as Skype founder Niklas Zennström and Daniel Ek from Spotify. Sweden produces good engineers, but its entrepreneurs can be cautious and are less good at sales. Full of tech-savvy early adopters, Sweden itself is a great test market, where trends spread very quickly. Swedish companies and brands are associated with quality and great design (think Volvo and IKEA) but many entrepreneurs are happy to run profitable, regional companies rather than setting their sights on global leadership.
Steffan Helgesson, from early and growth stage VC firm Creandum, said there were two options for his portfolio companies when considering internationalisation: the US or UK. The UK is a bigger market than Sweden, with good access to corporates and Asia - a "small US". That European corporates don't work closely with VCs and small companies was cited as another difference with the Valley. Also less common in the European ecosystem are lawyers and other advisors with deep experience of working with start-ups.
Focusing on the next big thing isn't the best approach to investing in Europe. The advice is to invest in innovation across the value chain and in all niches where we excel. There is a current window for good IPOs, but most tech companies in Sweden get acquired before they reach that point. We finished with a discussion about Asia and how there are seven or eight hubs emerging there, but it was a very challenging and unfamiliar place for European entrepreneurs to work. To which John Elvesjo (founder of eye-tracking and eye control firm Tobii Technology) responded, "Isn’t overcoming challenges what entrepreneurs are supposed to be able to do?" Quite.
The other panelists were Marie Reinius from the Swedish Venture Capital Association; Andreas Brojesson from Bird & Bird; Lea Bajc from Scandinavia’s largest VC firm, Northzone Ventures; and Per Axelsson, M&A expert at Handeelsbanken.
As well as the panel session, we also heard from a couple of local companies. First up was Freephoo, a mobile internet telephone company. Currently only available as an iPad app, it will soon be available for iPhone and in all the other app stores. By downloading the free app, users can make free calls to other Freephoo users, while calls to mobile and fixed lines are charged at very low, and clearly advertised, rates. Early users include ex-pats, especially from countries where international mobile and fixed line calls are very expensive.
There is no set up and you can access your account from any device. This simplicity is a key differentiator from the competition. Freephoo also integrates your address book, making it very easy to make and receive calls. This is an area where the founders think “brand Sweden” will help them: they promise not to abuse their access to your address book. Freephoo stands for trust.
The other presentation was from Complex Made Simple who are developing a free e-commerce solution for SMEs and individuals with a social layer.
Next stop: Berlin…