White Bull Stockholm for an Entrepreneurial Smörgåsbord

“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…

White Bull/UKTI Tech Entrepreneurs Series… first stop, Paris

It was a lovely spring evening in Paris and I was at the offices of Kahn & Associés, just off the Champs Elysées, to moderate the panel discussion at the first White Bull summit of the year. Despite the whole event being conducted in English, for the benefit of just a handful of us monoglots, the debate was extremely lively and interesting.

The mere suggestion from a British woman living in Paris called Christine, that the French tax regime hammered companies, drew the most heat. The R&D tax credits, the discounts on payroll taxes and corporation tax make France a great place for start-ups, according to the entrepreneurs in the room. Indeed, the panel added, the last five years has brought great economic liberalisation in France.

The evening was the first in a series of summits taking place in various European cities over the next few months, bringing together the tech entrepreneurial ecosystem to talk about "pathways to exit". That was the subject of further heated debate: the IPO market in France isn’t a great option for tech companies at the moment, so the most obvious exit route is via trade sale, usually to a US buyer. We briefly touched on Second Market, another option for creating liquidity but not yet available in Europe. Yann Mauchamp from Mutual Benefits (one of the evening's panellists) had identified 50 companies here for whom this would be a good option.

The fragmentation of both the market and regulatory systems in Europe were seen as further barriers to the growth of European global leaders. Platform companies like Meetic, SAP and Criteo were seen to have the greatest potential to overcome this.

The panel session followed three presentations from very different companies, all with real customers and revenues and now looking for growth funding to internationalise their businesses.

First up was iOS games developer, Pixowl, creators of Doodle Grub (essentially a modern take on Snake, using the device’s accelerometer, and a great hit in France). They were asking for funding in order to finish their next games, Safari Party and Phoenix Fighter, and expand into the US market. 2% of players of their first game are from the US, despite no marketing or reviews there, so they believe there is growth potential for them in that market.

Green Links couldn't have been more different. Using both a B2C and B2B model, they provide in-city delivery using electric powered bikes and small vans. Loads are delivered in the usual way to their city fringe locations during the night. They are then repacked into small delivery vehicles for the "last mile" delivery first thing in the morning, cheekily using via bike lanes and pavements. Somewhat disarmingly, they admitted that lots of people had already tried but failed to pull this type of business off, but their USP is their use of online logistics tracking and ability to incorporate the B2C element, ie the "first mile". Also, legislation is likely to change in their favour with delivery companies, and their clients, being penalised for not going green. TNT is a major client, so things look good for them.

Last, and most ambitious of all of them, I think, was MyID.is certified. Apparently the first global identification provider, MyIDis are looking to provide members of the public with a single online ID to be used in commercial transactions. They're currently rolling out in France through a hook up with the French postal service.

Over the course of the evening we also heard from LD&A Global and Truffle Capital.

I'm now looking forward to hearing from contributors at other White Bull events across Europe this summer and getting to see how tech entrepreneurial cultures differ across the continent. More observations from Stockholm in a couple of weeks...