10 ms·

> Why are there so many successful startups in Stockholm? Several reasons. First, you need to recognize that any Sweden-based startup will, when it gets to be

by chucky 8y ago

> Why are there so many successful startups in Stockholm? Several reasons. First, you need to recognize that any Sweden-based startup will, when it gets to be known internationally, have a Stockholm-based office. So it's not about a city of 1 million inhabitants, it's a country of 10 million that's the true number here. As an example, I believe Spotify opened their original offices in both Stockholm and Göteborg more or less simultaneously. With that said, a commonly stated reason for why Sweden in general has such a high prevalence of tech startups comes from a bunch of fortuitious decisions in the 90s and 00s. In 1998 Sweden's government started a program that allowed employers to sell their employees computers under a tax free scheme (the so called Hem-PC-reformen https://sv.wikipedia.org/wiki/Hem-PC-reformen https://sv.wikipedia.org/wiki/Hem-PC-reformen). This was extremely popular, and led almost every Swedish home to get an often extremely overpowered personal computer. Thus, practically everyone who was a kid in 1998-2006 (the rebate was cancelled in 2006) grew up with a computer. This gave Sweden a huge advantage compared to other countries in the early Internet revolution. Sweden has also invested heavily in building a fiber network, you have access to gigabit Internet even in some extremely rural areas. Another thing is that Sweden doesn't have the tradition of dubbing movies. That means kids will be exposed to English from an early age. This leads to Swedish tech companies not being afraid of hiring talent globally and generally use English as their business language. Finally, out of the 5 examples posted, one is Mojang, which is clearly an outlier. I'm not saying what Notch accomplished wasn't extremely impressive, but it was essentially a one-man operation, and probably shouldn't be held as an example of a trend.

snaily 8y ago
> As an example, I believe Spotify opened their original offices in both Stockholm and Göteborg more or less simultaneously. Without disputing the technical correctness, Spotify's Göteborg office was literally a single desk at a shared office for the first three years of its existence.
drakonka 8y ago
I previously read someone's take on this in relation to people feeling secure enough to take risks here (not just in Stockholm but Sweden as a whole I guess). While notch's success may be an outlier, the process of trying to do your own thing isn't here. I'm not sure when in his development Notch left King, but in general there are quite a few people here who just try to go their own way (sometimes completely outside of their previous industry even). It helps when you don't have to live in fear of being completely penniless should you fail, I think. Purely anecdotally, I am not part of a startup, but do a lot of hobby work in coffee shops around Stockholm. I'm always seeing/hearing people in local cafes discussing some new startup or project they are getting off the ground. I've also seen first hand many people get maybe a year or two of funding and start up their own game studios, for example. Of course not all of them end up being successful, but many people feel secure/comfortable enough to try. I think the volume of these attempts and people trying to do something new also helps drive up the number of "hits" overall, to be added to these kinds of lists.
- chucky 8y ago
  Definitely, having a social safety net that allows for moving on from failures is probably a huge factor.
  - asksol 8y ago
    But that safety net doesn't extend to startup founders does it? AFAIR In Norway, you need to have worked in a company as a regular employee for at least one or two years before you can claim unemployment benefits. Health insurance is always there, and so is basic social benefits (but the unemployment one is the only you can live on).
- Cenk 8y ago
  I think the social safety net is definitely a part of it, yes. But after working for a couple years at different startups in Stockholm I can say that another big factor is that most Swedish founders are either rich themselves, or their parents are, or they are very well connected. They don’t see themselves this way of course, they think they are building everything from scratch, but this does tend to be the case from my experience.
  - mhjas 8y ago
    I think it is becoming more common. In the early days it seems like there were more of a mix between rich drop outs and poor enthusiasts. Today, especially with the housing market, it seems like there are a lot more 'fake' companies. It used to be that if you came from a wealth family and didn't know what to do you started a public relations, event or media company to pretend that you were doing something. Today that is a "technology startup". Most of which are second or third tier companies in the sense of global reach. While much of the success of Swedish startups come from ending up being first tier companies. Maybe part of that was that Sweden sort of experienced the dot com bubble, which meant that there was less room for phonies for a while.
unixhero 8y ago
Good observations! You forgot one major thing. This goes for all of Finland, Sweden, Norway and Denmark. The winter is horribly dark and boring. (Unless you're super rich). Therefore most turn inwards, staying indoors, thinking deeply at problems, spending endless afternoons and nights on things. Be it software development, game development, car tuning, car engine work, engineering, knitting or just reading loads of books. I found this to be almost impossible to achieve when I moved from Norway to Australia. There I was outside hanging out with friends or just doing stuff on the beach or whatever. The deep focus was harder to achieve. Quality of life was insanely better there, yet somehow I missed the possibility to sit down and be productive in some narrow topic.
- fredsir 8y ago
  > Quality of life was insanely better there, > yet somehow I missed the possibility to sit down and be productive in some narrow topic. Do you mean that you preferred the life you led in Australia to the one in Norway? If not, how do you mean that quality of life was insanely better?
  - reitanqild 8y ago
    >> I found this to be almost impossible to achieve when I moved from Norway to Australia. > Do you mean that you preferred the life you led in Australia to the one in Denmark? Calling a Norwegian a Dane is about as popular as saying a Canadian is from USA or calling an American British I guess ;-)
    - fredsir 8y ago
      Ah, a simple mistake :)
      - reitanqild 8y ago
        That's what I guessed :-) (Seems I've offended someone else though, but I have no idea why.)
  - 8y ago
oxymoron 8y ago
I think Stockholm does have more startups than the rest of Sweden, though, so there is probably more to it. The article understates the size of Stockholm a bit though. As measured by urban area it’s a city of 2.5 million.
- jnurmine 8y ago
  Not only that, but within a one hour drive are Västerås and Uppsala, big cities in Sweden's scale. The former hosts ABB and has tons of robotics related research, the latter has one of the major universities. The startup scene is smaller in Västerås than in Uppsala though. Uppsala produced Klarna and Skype, Västerås produced Pingdom, to name some.
  - deleted 8y ago
    [deleted]
kayoone 8y ago
I remember that in the late 90ies/early 2000 that swedes or scandinavians always had these super low ping internet connections. Combine that with a long winter and you have a lot of tech experienced youngsters that spend a lot of time on projects (in this case gaming). They did (and still do) extremely way in esports in relation to the size of the population.
mhjas 8y ago
I think it can be hard for people to appreciate the differences because the truly different things are those one takes for granted. To not make this too long I will go directly to what I think has made the difference: A relatively egalitarian society with a lot of trust between people and towards the government has made progress relatively effortless. When people don't feel the need to guard their own position because they might end up getting screwed there often isn't any good reason to be against development. A relatively large amount of excess time, security and knowledge that enable people to something else. Startups are ultimately about harnessing excess potential. If all the value are capture by some other industry or the housing market there won't be much left over for startups. Various cultural factors enabled by those things. Like being able to be independent (with the help of the government). Not being afraid to leave value on the table. An overall sort of generous, or at least non-petty, society. If you look at factors like these, you can actually draw a lot of parallels to somewhere like SV compared to the rest of the world. SV is to at least some degree a recreation of academic life at its best. Which is the area of US society that would be most similar to Sweden.
- deleted 8y ago
  [deleted]
- pesmhey 8y ago
  When people don't feel the need to guard their own position because they might end up getting screwed... I’m not sure this is too applicable to SV, lol, nor academic life in the US.
mercer 8y ago
Most of the things you mention also apply to The Netherlands, except for possibly the tax-free computer scheme (not sure about that one). As far as I can tell we're not really all that note-worthy startup-wise. Assuming that's true, any ideas what might be the differentiating factor? From what I understand, both Holland and Sweden are culturally similar enough that I can't immediately think of other factors that make 'us' more hostile to startups.
- Aeolun 8y ago
  It may just be me, but I have a feeling that Dutch startups have a tendency to focus on the Netherlands first, and either don’t feel the need to go global or just fail to do so. Also, compensation. The Netherlands has a lot of good people, but they’ll leave for greener pastures.
  - mercer 8y ago
    > It may just be me, but I have a feeling that Dutch startups have a tendency to focus on the Netherlands first, and either don’t feel the need to go global or just fail to do so. That leaves the more interesting question: why is The Netherlands different from Sweden in this regard? My impression was that The Netherlands, if anything, is more internationally-focused. > Also, compensation. The Netherlands has a lot of good people, but they’ll leave for greener pastures. Does Sweden pay better, taking into account cost of living? And if so, why? (not disagreeing, btw, just more questions)
- chubot 8y ago
  That's an interesting question, especially taking into account that I know of and worked with many computer scientists from Holland, but not from from Sweden. You would think that Holland would have the expertise to form many startups. Obviously, there is the business side in addition to the computer science side. I don't know much about that with respect to Holland. But one possibility is that Dutch computer scientists tend to leave Holland to work. That explains why I know of so many as an American? (e.g. I worked with Guido van Rossum and Werner Vogels advised my master's project)
- 8y ago
cuspycode 8y ago
Also, Sweden was the first European country that was connected to the U.S. Internet, or more specifically to NSFNET [1][2]. This was because the adoption of TCP/IP protocols for wide area networks came earlier in Sweden than in other parts of Europe, for various serendipitous reasons. A funny anecdote is that Switzerland could have beat Sweden to be connected first, but they were delayed because they had to renumber all their networks at CERN that were already using TCP/IP. Initially it was just non-commercial Internet for academic institutions, but lots of students were exposed to the technology and the infrastructure early on. [1]. https://en.wikipedia.org/wiki/History_of_the_Internet_in_Sweden https://en.wikipedia.org/wiki/History_of_the_Internet_in_Swe... [2]. https://en.wikipedia.org/wiki/Internet#History https://en.wikipedia.org/wiki/Internet#History
L_Rahman 8y ago
It's interesting the quite possibly the most important condition didn't get mentioned. Sweden's social safety net is among the strongest in the world. If the floor on failure is that you still have access to food, housing and healthcare then quitting a full-time job to start a company becomes much more possible. More people starting companies, more attempts at big targets, more outlier successes.
- jgamman 8y ago
  maybe the opposite is true too - SV/US has more innovation because there's absolutely nothing to lose and you can't expect to eat/medical because US.
- fibbery 8y ago
  Also education and childcare
cambaceres 8y ago
One other reason is that taxation of income gets extremly high (60 %) when the salary rises above ~$7000/month. This makes people feel that it is impossible to get rich by working for someone else in Sweden, which in turn pushes productive people into startups.
- repolfx 8y ago
  That could only apply to founders who can sell parts of their company, surely. Employee number 1 would still face the same tax ceiling, and you need employees to build a company. The ratio of founders:employees will still be tiny even in Sweden.
  - cambaceres 8y ago
    No, since stock are offered to early emplyees, which are taxed way lower.
wingerlang 8y ago
That's interesting about the reform. I was a kid during those years and I recall us buying our computers through my dads work.
stef25 8y ago
> Another thing is that Sweden doesn't have the tradition of dubbing movies Here in Belgium, in the Flemish part of the country we don't dub movies but in the French part we do. The levels of English are massively different, not sure if this is the main reason.

by chucky 8y ago

snaily 8y ago

> As an example, I believe Spotify opened their original offices in both Stockholm and Göteborg more or less simultaneously. Without disputing the technical correctness, Spotify's Göteborg office was literally a single desk at a shared office for the first three years of its existence.

drakonka 8y ago

I previously read someone's take on this in relation to people feeling secure enough to take risks here (not just in Stockholm but Sweden as a whole I guess). While notch's success may be an outlier, the process of trying to do your own thing isn't here. I'm not sure when in his development Notch left King, but in general there are quite a few people here who just try to go their own way (sometimes completely outside of their previous industry even). It helps when you don't have to live in fear of being completely penniless should you fail, I think. Purely anecdotally, I am not part of a startup, but do a lot of hobby work in coffee shops around Stockholm. I'm always seeing/hearing people in local cafes discussing some new startup or project they are getting off the ground. I've also seen first hand many people get maybe a year or two of funding and start up their own game studios, for example. Of course not all of them end up being successful, but many people feel secure/comfortable enough to try. I think the volume of these attempts and people trying to do something new also helps drive up the number of "hits" overall, to be added to these kinds of lists.

chucky 8y ago
Definitely, having a social safety net that allows for moving on from failures is probably a huge factor.
- asksol 8y ago
  But that safety net doesn't extend to startup founders does it? AFAIR In Norway, you need to have worked in a company as a regular employee for at least one or two years before you can claim unemployment benefits. Health insurance is always there, and so is basic social benefits (but the unemployment one is the only you can live on).
Cenk 8y ago
I think the social safety net is definitely a part of it, yes. But after working for a couple years at different startups in Stockholm I can say that another big factor is that most Swedish founders are either rich themselves, or their parents are, or they are very well connected. They don’t see themselves this way of course, they think they are building everything from scratch, but this does tend to be the case from my experience.
- mhjas 8y ago
  I think it is becoming more common. In the early days it seems like there were more of a mix between rich drop outs and poor enthusiasts. Today, especially with the housing market, it seems like there are a lot more 'fake' companies. It used to be that if you came from a wealth family and didn't know what to do you started a public relations, event or media company to pretend that you were doing something. Today that is a "technology startup". Most of which are second or third tier companies in the sense of global reach. While much of the success of Swedish startups come from ending up being first tier companies. Maybe part of that was that Sweden sort of experienced the dot com bubble, which meant that there was less room for phonies for a while.

unixhero 8y ago

Good observations! You forgot one major thing. This goes for all of Finland, Sweden, Norway and Denmark. The winter is horribly dark and boring. (Unless you're super rich). Therefore most turn inwards, staying indoors, thinking deeply at problems, spending endless afternoons and nights on things. Be it software development, game development, car tuning, car engine work, engineering, knitting or just reading loads of books. I found this to be almost impossible to achieve when I moved from Norway to Australia. There I was outside hanging out with friends or just doing stuff on the beach or whatever. The deep focus was harder to achieve. Quality of life was insanely better there, yet somehow I missed the possibility to sit down and be productive in some narrow topic.

fredsir 8y ago
> Quality of life was insanely better there, > yet somehow I missed the possibility to sit down and be productive in some narrow topic. Do you mean that you preferred the life you led in Australia to the one in Norway? If not, how do you mean that quality of life was insanely better?
- reitanqild 8y ago
  >> I found this to be almost impossible to achieve when I moved from Norway to Australia. > Do you mean that you preferred the life you led in Australia to the one in Denmark? Calling a Norwegian a Dane is about as popular as saying a Canadian is from USA or calling an American British I guess ;-)
  - fredsir 8y ago
    Ah, a simple mistake :)
    - reitanqild 8y ago
      That's what I guessed :-) (Seems I've offended someone else though, but I have no idea why.)
- 8y ago

oxymoron 8y ago

I think Stockholm does have more startups than the rest of Sweden, though, so there is probably more to it. The article understates the size of Stockholm a bit though. As measured by urban area it’s a city of 2.5 million.

jnurmine 8y ago
Not only that, but within a one hour drive are Västerås and Uppsala, big cities in Sweden's scale. The former hosts ABB and has tons of robotics related research, the latter has one of the major universities. The startup scene is smaller in Västerås than in Uppsala though. Uppsala produced Klarna and Skype, Västerås produced Pingdom, to name some.
- deleted 8y ago
  [deleted]

kayoone 8y ago

I remember that in the late 90ies/early 2000 that swedes or scandinavians always had these super low ping internet connections. Combine that with a long winter and you have a lot of tech experienced youngsters that spend a lot of time on projects (in this case gaming). They did (and still do) extremely way in esports in relation to the size of the population.

mhjas 8y ago

I think it can be hard for people to appreciate the differences because the truly different things are those one takes for granted. To not make this too long I will go directly to what I think has made the difference: A relatively egalitarian society with a lot of trust between people and towards the government has made progress relatively effortless. When people don't feel the need to guard their own position because they might end up getting screwed there often isn't any good reason to be against development. A relatively large amount of excess time, security and knowledge that enable people to something else. Startups are ultimately about harnessing excess potential. If all the value are capture by some other industry or the housing market there won't be much left over for startups. Various cultural factors enabled by those things. Like being able to be independent (with the help of the government). Not being afraid to leave value on the table. An overall sort of generous, or at least non-petty, society. If you look at factors like these, you can actually draw a lot of parallels to somewhere like SV compared to the rest of the world. SV is to at least some degree a recreation of academic life at its best. Which is the area of US society that would be most similar to Sweden.

deleted 8y ago
[deleted]
pesmhey 8y ago
When people don't feel the need to guard their own position because they might end up getting screwed... I’m not sure this is too applicable to SV, lol, nor academic life in the US.

mercer 8y ago

Most of the things you mention also apply to The Netherlands, except for possibly the tax-free computer scheme (not sure about that one). As far as I can tell we're not really all that note-worthy startup-wise. Assuming that's true, any ideas what might be the differentiating factor? From what I understand, both Holland and Sweden are culturally similar enough that I can't immediately think of other factors that make 'us' more hostile to startups.

Aeolun 8y ago
It may just be me, but I have a feeling that Dutch startups have a tendency to focus on the Netherlands first, and either don’t feel the need to go global or just fail to do so. Also, compensation. The Netherlands has a lot of good people, but they’ll leave for greener pastures.
- mercer 8y ago
  > It may just be me, but I have a feeling that Dutch startups have a tendency to focus on the Netherlands first, and either don’t feel the need to go global or just fail to do so. That leaves the more interesting question: why is The Netherlands different from Sweden in this regard? My impression was that The Netherlands, if anything, is more internationally-focused. > Also, compensation. The Netherlands has a lot of good people, but they’ll leave for greener pastures. Does Sweden pay better, taking into account cost of living? And if so, why? (not disagreeing, btw, just more questions)
chubot 8y ago
That's an interesting question, especially taking into account that I know of and worked with many computer scientists from Holland, but not from from Sweden. You would think that Holland would have the expertise to form many startups. Obviously, there is the business side in addition to the computer science side. I don't know much about that with respect to Holland. But one possibility is that Dutch computer scientists tend to leave Holland to work. That explains why I know of so many as an American? (e.g. I worked with Guido van Rossum and Werner Vogels advised my master's project)
8y ago

cuspycode 8y ago

Also, Sweden was the first European country that was connected to the U.S. Internet, or more specifically to NSFNET [1][2]. This was because the adoption of TCP/IP protocols for wide area networks came earlier in Sweden than in other parts of Europe, for various serendipitous reasons. A funny anecdote is that Switzerland could have beat Sweden to be connected first, but they were delayed because they had to renumber all their networks at CERN that were already using TCP/IP. Initially it was just non-commercial Internet for academic institutions, but lots of students were exposed to the technology and the infrastructure early on. [1]. https://en.wikipedia.org/wiki/History_of_the_Internet_in_Sweden https://en.wikipedia.org/wiki/History_of_the_Internet_in_Swe... [2]. https://en.wikipedia.org/wiki/Internet#History https://en.wikipedia.org/wiki/Internet#History

L_Rahman 8y ago

It's interesting the quite possibly the most important condition didn't get mentioned. Sweden's social safety net is among the strongest in the world. If the floor on failure is that you still have access to food, housing and healthcare then quitting a full-time job to start a company becomes much more possible. More people starting companies, more attempts at big targets, more outlier successes.

jgamman 8y ago
maybe the opposite is true too - SV/US has more innovation because there's absolutely nothing to lose and you can't expect to eat/medical because US.
fibbery 8y ago
Also education and childcare

cambaceres 8y ago

One other reason is that taxation of income gets extremly high (60 %) when the salary rises above ~$7000/month. This makes people feel that it is impossible to get rich by working for someone else in Sweden, which in turn pushes productive people into startups.

repolfx 8y ago
That could only apply to founders who can sell parts of their company, surely. Employee number 1 would still face the same tax ceiling, and you need employees to build a company. The ratio of founders:employees will still be tiny even in Sweden.
- cambaceres 8y ago
  No, since stock are offered to early emplyees, which are taxed way lower.

wingerlang 8y ago

That's interesting about the reform. I was a kid during those years and I recall us buying our computers through my dads work.

stef25 8y ago

> Another thing is that Sweden doesn't have the tradition of dubbing movies Here in Belgium, in the Flemish part of the country we don't dub movies but in the French part we do. The levels of English are massively different, not sure if this is the main reason.