During my recent trip to Helsinki, I had a chance to catch up with Pekka Koskinen, a successful serial entrepreneur and founder and CEO of Leadfeeder, a Web analytics tool for sales intelligence.
Koskinen is a well-known figure in the Finnish and Nordic tech ecosystems, specialising in B2B SaaS companies.
Given his background and experience with the startup community in Helsinki, I thought he was the perfect person to speak to about the current ecosystem there, and I welcomed the chance to get his thoughts.
How would you describe Helsinki’s current status as a hub for tech / startups? What are the biggest changes that will inevitably happen there in the years ahead?
Helsinki has been getting great traction as one of the main startup hubs in Europe. Over the course of the ten years that have followed Nokia’s regression, the startup ecosystem has been rapidly developing.
There are many up-and-coming startups coming from Helsinki, and not only from the gaming vertical. The government is giving lots of grants and loans to startups, and many co-working spaces have emerged around Helsinki.
Moving forward, we are seeing more B2B enterprise software startups from Finland becoming major players in their own niches. Also, more traditional enterprise companies are realizing that they need to learn from startups, and this gives lots of opportunities for cooperation between enterprises and startups.
Why have you chosen to continue to operate your businesses primarily in Helsinki? Why not go somewhere else that’s more recognized as a booming tech hub?
Currently we have 11 of our 17 employees working in Helsinki, five elsewhere in Europe and one in the US. It has been easy to start and grow a company in Finland – we have a good startup ecosystem, and the quality of talent is very good.
Going forward, we are planning to establish an office in the US, most probably in New York, since the US has a better talent pool when it comes to marketing.
Looking at the big picture in retrospect, did the rise and fall of Nokia help or hurt Helsinki’s standing today as a tech hub? What other organizations have had the biggest impact on the local ecosystem in your estimation?
Many people think that startup companies have recruited a lot of talent that used to be at Nokia. This is not really the case – from what I’ve seen, not many former Nokia employees have found good fits in startups.
The fall of Nokia might have caused a lot of ripples in the Finnish government, but it hasn’t had such a big effect on the startup ecosystem. Aaltoes, Startup Sauna and Slush have played a bigger role in getting the startup ecosystem up and running.
I think the biggest driver for Helsinki ecosystem is Slush. It’s becoming better and better each year. This year it was world-class event – much better than the Web Summit in Lisbon, for example.
What should Helsinki’s public institutions and business community do in order to help cultivate its tech / startup scene?
Helsinki is already doing a good job with helping startups to grow. Affordable co-working spaces, accelerator programs and public financing are reasonably available.
There’s not much that the public sector can do to boost entrepreneurship, but they can make Finland a more conducive place for companies. This can be achieved by making the labor market more flexible and lowering taxes as well as the side costs associated with employing a team.
To what extent is international recognition important to Helsinki’s status as a tech hub? What’s the ideal mix of investor types for a Helsinki tech company trying to grow quickly?
I think Helsinki has already proved it can foster great tech companies. It’s now up to the individual companies to prove their worth.
Many Finnish startups raise their seed round financing from Finnish angel and VC investors and receive governmental loans and grants. There are relatively few A-rounds raised within Finland, though; startups here typically raise their A-rounds from European investors.
After the A-round, many aim for the US markets and raise subsequent rounds of funding there.
You’re a big proponent of working with remote team members, as well as importing talent from overseas for relocation to Helsinki. How do you recommend that founders go about forging recruitment strategies that will serve them best?
As technology enables us to work from anywhere, it makes sense to hire from the global talent pool. Many Eastern European countries have great tech talent, so hiring remote workers from there is a good option.
Marketers and sales people should be recruited from the same area where your customers are, so we generally look for people from Western Europe and US.
Remote working requires more management processes to get cooperation that’s comparable to what’s happening inside the core team, like in a normal office environment.
It’s no surprise that Finland is considered one of the most innovative nations in the world. With accolades such as ranking fourth on Cornell University’s Global Innovation Index, the country has the third-highest R&D/GDP ratio in the world, according to the National Science Foundation.
Koskinen is clearly not alone in finding Finland to be an ideal breeding ground for startups. His experiences with Leadfeeder and the companies he founded before it shows the potential for startups in the tech space and beyond.