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Title is misleading. Please add "per capita" !!! Stockholm is so over-hyped. Yes, there is a lot of engineering culture, but there is so little risk capital av

by sheraz 11y ago

Title is misleading. Please add "per capita" !!! Stockholm is so over-hyped. Yes, there is a lot of engineering culture, but there is so little risk capital available at the bottom is it truly laughable. Furthermore, I don't see many of these unicorns putting a lot back into the ecosystem in terms of investment, social capital, or outreach. Sweden's needs her of "Paypal mafia [1], Facebook Mafia [2], Trilogy Mafia, and Dellionaires [3] if this startup startup ecosystem is to really thrive. [1] - https://en.wikipedia.org/wiki/PayPal_Mafia https://en.wikipedia.org/wiki/PayPal_Mafia [2] - https://www.cbinsights.com/blog/facebook-mafia/ https://www.cbinsights.com/blog/facebook-mafia/ [3] - http://www.barrypopik.com/index.php/new_york_city/entry/dellionaire_dell_computer_millionaire http://www.barrypopik.com/index.php/new_york_city/entry/dell... (edit) so more thoughts

gozo 11y ago
> little risk capital available at the bottom Compared to where? The days where you get funding based on an idea is over. I don't think the funding situation is particularly bad "per capita" [0]. There are other problems with Stockholm of course, but that's another story. [0] http://blogs.wsj.com/tech-europe/2013/11/11/how-entrepreneurial-is-europe/ http://blogs.wsj.com/tech-europe/2013/11/11/how-entrepreneur...
- sheraz 11y ago
  Compared to London, NYC, LA, SF, Austin, Berlin to start. Secondly, I have issues with the whole "per capita" comparison. It is an important and often over-looked detail when looking at these ecosystems.
  - gozo 11y ago
    I don't see how that, without any data, isn't just "the grass is greener". No one is surprised that Stockholm isn't London, that doesn't really speak to the different ecosystems nor that you can raise money across borders. There can be issues with "per capita" measurements, but that pretty hard to discuss when you didn't bother to include your reasoning.
    - sheraz 11y ago
      OK, data from CBINsights (They are awesome) [1] > raise money across borders Tell that to any number of seed-stage, bootstrapped companies in Stockholm. A fund-raising "roadshow" from Stockholm to London can be very costly -- especially if it is unsuccessful. [1] - https://www.cbinsights.com/reports/CB-Insights-KPMG-Report-Q3-2015.pdf https://www.cbinsights.com/reports/CB-Insights-KPMG-Report-Q...
      - gozo 11y ago
        Linking a 91 page presentation without specifying your point isn't very helpful. As I said, you don't get funding for an idea anymore so being bootstrapped is becoming the norm. The presentation even says that "all in all, Q3 was a quarter for big, big deals. Less so for seed-stage and Angel financing, both of which were down for the fifth consecutive quarter on a global basis". Fundraising is never easy, but having more and more eyes on Stockholm helps.
  - leogiertz 11y ago
    As other commenters has said, fundraising is never easy no matter where you are. There's plenty of super early stage money you can get (i.e. up to $100k) from government grants etc. so that part isn't that hard. What's lacking in Stockholm is a strong angel scene, and what's especially lacking are larger angel investors that does investments of $100k-$500k. I.e. investments that are too small for a fund, but a bit too large for someone that just does investments as a hobby. However, one of the things I'm doing right now is helping some of the local venture funds and some UK based ones to scout for investments, and the perspective from the other side of the table is that there's currently a shortage of fundable projects that are raising $500k-$2m. Also there's a new monster fund being announced soon. Rumours on the street (i.e. drunk people at startup events who let their mouths slip) is that it's going to be the largest first time fund globally so the competition among VCs for investments in that size will increase. If you are doing something interesting but lack connections to VCs or angels, ping me (email in bio) and I'd be more than happy to make introductions.
- ThomPete 11y ago
  It is very bad. You really just have to try and raise money there to realize how bad. Most of Scandinavia are still in many ways caught in the idea of loans rather than risky investments. And most investors in Europe are very risk averse.
  - gozo 11y ago
    Maybe it is, but on the other hand I've never heard anyone which couldn't easily get funding, i.e. the majority of people, not complain about it. I would even expect that the factors of ones specific situation quickly overtake the importance of the general funding situation anyway. What I do know is that if you play your cards right you can make your own seed funding in a year, even if the housing market is making this slightly harder these days.
pbreit 11y ago
Niklas Zennstrom could probably be put in that company. https://en.wikipedia.org/wiki/Atomico https://en.wikipedia.org/wiki/Atomico
- sheraz 11y ago
  But he is not. Not only is he largely based in London, he is not making seed stage investments [1]. The Atomico website does not list Stockholm as a city where they have an office. Very telling... [1] - "Niklas Zennström’s Atomico leaves early-stage focus behind with new $476m fund" - http://venturevillage.eu/atomico-476m-fund http://venturevillage.eu/atomico-476m-fund -
ThomPete 11y ago
Exactly. It's more of an analogy than based on any specific access to talent. There is great design talent in Scandinavia but thats just not enough to build a company.
- gozo 11y ago
  Except if you look at the successes they are as based on engineering and business talent as much as design. Spotify, p2p + licensing deals. Klarna, Erlang + credit checks. King, game development + gamification.
  - jmknoll 11y ago
    I'm not sure that I would hold up King.com as an example of either engineering or business talent. On the technical side, I've not seen anything very impressive about their games, and their business practices seemingly consist of ripping off (later settled out of court) an indie developer who built a game in memory of his late mother, and dragging him into a protracted legal battle. Edit to include sources: https://en.wikipedia.org/wiki/King_(company)#Trademark_and_cloning_disputes https://en.wikipedia.org/wiki/King_(company)#Trademark_and_c... http://www.snopes.com/politics/business/candycrush.asp http://www.snopes.com/politics/business/candycrush.asp
    - gozo 11y ago
      Not so much technical skill, as being able to run one of these "mass" game studios says something about the availability and flexibility of the talent pool. They've been profitable since 2005 so they've been doing something right. Point being, unless you want to call gamification design, their success was far more based on engineering and business. Like you said it wasn't an original idea, but they could relativly quickly produce a clone of something and monetize. I'm not claiming that this is a particularly great way of doing business, just that it's inaccurate to say that it was design.

by sheraz 11y ago

gozo 11y ago

> little risk capital available at the bottom Compared to where? The days where you get funding based on an idea is over. I don't think the funding situation is particularly bad "per capita" [0]. There are other problems with Stockholm of course, but that's another story. [0] http://blogs.wsj.com/tech-europe/2013/11/11/how-entrepreneurial-is-europe/ http://blogs.wsj.com/tech-europe/2013/11/11/how-entrepreneur...

sheraz 11y ago
Compared to London, NYC, LA, SF, Austin, Berlin to start. Secondly, I have issues with the whole "per capita" comparison. It is an important and often over-looked detail when looking at these ecosystems.
- gozo 11y ago
  I don't see how that, without any data, isn't just "the grass is greener". No one is surprised that Stockholm isn't London, that doesn't really speak to the different ecosystems nor that you can raise money across borders. There can be issues with "per capita" measurements, but that pretty hard to discuss when you didn't bother to include your reasoning.
  - sheraz 11y ago
    OK, data from CBINsights (They are awesome) [1] > raise money across borders Tell that to any number of seed-stage, bootstrapped companies in Stockholm. A fund-raising "roadshow" from Stockholm to London can be very costly -- especially if it is unsuccessful. [1] - https://www.cbinsights.com/reports/CB-Insights-KPMG-Report-Q3-2015.pdf https://www.cbinsights.com/reports/CB-Insights-KPMG-Report-Q...
    - gozo 11y ago
      Linking a 91 page presentation without specifying your point isn't very helpful. As I said, you don't get funding for an idea anymore so being bootstrapped is becoming the norm. The presentation even says that "all in all, Q3 was a quarter for big, big deals. Less so for seed-stage and Angel financing, both of which were down for the fifth consecutive quarter on a global basis". Fundraising is never easy, but having more and more eyes on Stockholm helps.
- leogiertz 11y ago
  As other commenters has said, fundraising is never easy no matter where you are. There's plenty of super early stage money you can get (i.e. up to $100k) from government grants etc. so that part isn't that hard. What's lacking in Stockholm is a strong angel scene, and what's especially lacking are larger angel investors that does investments of $100k-$500k. I.e. investments that are too small for a fund, but a bit too large for someone that just does investments as a hobby. However, one of the things I'm doing right now is helping some of the local venture funds and some UK based ones to scout for investments, and the perspective from the other side of the table is that there's currently a shortage of fundable projects that are raising $500k-$2m. Also there's a new monster fund being announced soon. Rumours on the street (i.e. drunk people at startup events who let their mouths slip) is that it's going to be the largest first time fund globally so the competition among VCs for investments in that size will increase. If you are doing something interesting but lack connections to VCs or angels, ping me (email in bio) and I'd be more than happy to make introductions.
ThomPete 11y ago
It is very bad. You really just have to try and raise money there to realize how bad. Most of Scandinavia are still in many ways caught in the idea of loans rather than risky investments. And most investors in Europe are very risk averse.
- gozo 11y ago
  Maybe it is, but on the other hand I've never heard anyone which couldn't easily get funding, i.e. the majority of people, not complain about it. I would even expect that the factors of ones specific situation quickly overtake the importance of the general funding situation anyway. What I do know is that if you play your cards right you can make your own seed funding in a year, even if the housing market is making this slightly harder these days.

pbreit 11y ago

Niklas Zennstrom could probably be put in that company. https://en.wikipedia.org/wiki/Atomico https://en.wikipedia.org/wiki/Atomico

sheraz 11y ago
But he is not. Not only is he largely based in London, he is not making seed stage investments [1]. The Atomico website does not list Stockholm as a city where they have an office. Very telling... [1] - "Niklas Zennström’s Atomico leaves early-stage focus behind with new $476m fund" - http://venturevillage.eu/atomico-476m-fund http://venturevillage.eu/atomico-476m-fund -

ThomPete 11y ago

Exactly. It's more of an analogy than based on any specific access to talent. There is great design talent in Scandinavia but thats just not enough to build a company.

gozo 11y ago
Except if you look at the successes they are as based on engineering and business talent as much as design. Spotify, p2p + licensing deals. Klarna, Erlang + credit checks. King, game development + gamification.
- jmknoll 11y ago
  I'm not sure that I would hold up King.com as an example of either engineering or business talent. On the technical side, I've not seen anything very impressive about their games, and their business practices seemingly consist of ripping off (later settled out of court) an indie developer who built a game in memory of his late mother, and dragging him into a protracted legal battle. Edit to include sources: https://en.wikipedia.org/wiki/King_(company)#Trademark_and_cloning_disputes https://en.wikipedia.org/wiki/King_(company)#Trademark_and_c... http://www.snopes.com/politics/business/candycrush.asp http://www.snopes.com/politics/business/candycrush.asp
  - gozo 11y ago
    Not so much technical skill, as being able to run one of these "mass" game studios says something about the availability and flexibility of the talent pool. They've been profitable since 2005 so they've been doing something right. Point being, unless you want to call gamification design, their success was far more based on engineering and business. Like you said it wasn't an original idea, but they could relativly quickly produce a clone of something and monetize. I'm not claiming that this is a particularly great way of doing business, just that it's inaccurate to say that it was design.