Pauliina Martikainen, The role of marketing and branding is often overlooked by early-stage deep-tech startups

Pauliina Martikainen, The role of marketing and branding is often overlooked by early-stage deep-tech startups

Editor’s note: This interview has been recorded and published as part of a content project in collaboration with the Japan External Trade Organization (JETRO).

Over the past couple of years, the Nordics have seen an influx of new early-stage VC firms that entered the market fueled by the success of local startups, from Supercell to Spotify. One of the relatively new entrants is, which focuses on deep-tech startups and uses — among other things — its expertise in marketing and branding to support its portfolio companies. We spoke to Maki's investment director Pauliina Martikainen at the TechChill 2020 conference in Riga to learn more about the firm's approach.

This interview has been edited for clarity and brevity. Listen to the conversation in full on our podcast.

Q: What does an investment director do?

Some days, a bit of everything. But generally, I'm responsible for getting deal flow to the firm, analysing the deal flow, executing deals, and then also working with our portfolio companies.

Q: And what did you do before joining Maki?

I was already in the VC space before Maki. While I was still in university, I co-founded a pre-seed micro VC fund called Wave Ventures. We raised money from Supercell founders, Skype founders, and so on, who were crazy enough to give us their money. And then we needed to figure out what to do with that, so that was a good learning experience.

I also worked in marketing and communications. I was first on an agency side, and then in-house. For instance, at this agency, there were a lot of global tech, lifestyle, food and pharma companies who wanted to launch their products in the Nordics or in Finland. So, I did a lot of work around PR, digital marketing, product messaging, and product positioning.

Q: And what happened to that micro VC fund?

It still exists. We invested in very cool and already companies, we were all still students — it was seven guys and me, so a good learning experience in many ways. The fund was set up in a way that we'd managed it ourselves for a few years, and we handed it over to a new generation of students, so that they would then also gain the same experiences of venture capital and entrepreneurship.

Q: How is Maki different from any other VC in the Nordics?

We are an €80 million fund, we invest in seed and Series A stages, and with seed I mean all shades of seed — so it can be also very early stuff, like we've done some deals that were pre-product and pre-revenue. Initial tickets ranging from €200,000 up to €2 million; we've been fairly flexible on that front.

We invest in deep-tech and brand-driven companies. In practical terms, that means that our portfolio at the moment is everything from quantum computing to new materials and processes, food tech, medtech… But then we also have the more typical VC cases like enterprise SaaS, fintech, games, entertainment…

Q: …and karaoke

Exactly. So, fairly broad focus actually. And to the question of what makes us different: first of all, it's the way Maki was set up. We saw that VCs typically primarily raised from big institutional investors. So, we did it differently. We did our whole first close primarily with private wealthy individuals. We have the Skype founder Niklas Zennström, the CEO of Small Giant Games, Supercell founders, and so on. And then on top of that, we took some institutional money from some great institutions from Finland and also, for instance, Tencent or Mistletoe from Asia. We try and leverage this network for the good of our portfolio companies.

On a more practical level — this came as a bit of surprise for us, but we've gotten some good feedback from entrepreneurs, — basically, we don't believe in consensus. We try to make our decisions fairly fast, and it only requires one person from our investment team who is super excited about the deal and 100 percent convinced about the vision that the team has. Then he or she can pursue the deal. This is something that we've learned that the entrepreneurs have appreciated.

Q: In your talk on stage, you mentioned the Maki House — what's that?

That's how we call this community that we have. Our core team is fairly lean, we're four people on the deal side — two partners and two investment directors, myself and my colleague, — and then our CFO, Josefina, and an assistant who are making sure that the fund runs smoothly. On top of this we have the LP base of 73 LPs, which is not the typical setup for a VC firm, and then our portfolio companies, and then of course some other industry experts as well. To this community we refer as the Maki House.

Q: What's in the name? What does Maki mean?

Excellent question. I wish I had a better narrative around this, I still need to work on that. But actually, the last names of our two partners are Kivimäki and Palomäki, so that's where the name comes from.

Q: Are you still investing from your first fund? 

Yes, it's the first fund of €80 million. We officially launched only two years ago.

Q: Let's turn to your keynote at the TechChill conference. You were talking about the importance of marketing, and branding, and communications for early-stage startups, particularly deep tech startups. Can you summarise the main idea of the talk?

The core is that even if you understood the strategic role that marketing or branding can play for an early-stage startup, in our experience, it's often overlooked when it comes to deep-tech startups. So the core message was to pay attention to that side. Our own portfolio companies often start with a fairly limited team in the beginning, and oftentimes there are no commercial people in the team. What we've tried to emphasise with them is that they need to start thinking about marketing and branding early on, and when they do, there has to be someone who actually has the commercial understanding and can start from forming the value proposition for the company. Often it is either not done, or it's outsourced, which I think is a very bad idea.

Q: Which is better — not done or outsourced? 

Outsourcing can maybe work in some situations, but then you really need to know what you're buying. Oftentimes if you do not come from that commercial background, it's fairly hard to outsource, and the value proposition is such a core of the company that it should come from within the company. The vision should come from within the company as well, because the value proposition actually should act as glue between the company's different functions and help making critical business trade-offs when it comes, for example, to defining your next product features.

Q: Is this topic close to your heart because of your experience in working in PR and marketing?

Yes, and it's also something that we discuss a lot with our team. It's something that the whole Maki team has very close to close to our heart, because we actually think that a lot of value is left on the table if companies do not pay attention to these things.

Q: Is it something that you're trying to work on with your portfolio companies?

Absolutely. For instance, with every new entrant to the portfolio, we hold a “brand lab” together with an external agency to spar. We sit down and talk about resources. Oftentimes, it depends a bit on the stage of the company, so there can be some other pain points, but especially with our early-stage deals, it often goes comes down to the value proposition and trying to twist it a little. But then, of course, if it's clear that the current team does not have the needed skills to get it further, then maybe it's time to start allocating resources into recruiting more people.

Q: What I also noticed in the keynote was that you were talking about three things: marketing, branding, and communications. Do you think that there should actually be one person in an early-stage startup to embody all three of these competencies?

There is rarely such a hyper-multitalented person who can take care of all that. Whenever we realise that there is a need to bring someone on board who can take the lead in forming the value position, we look at what background we're looking for. It can be a CMO or CCO, it depends on how you are going to build the commercial side of your company. Even if we talk about only CMOs, there are different profiles, of course. Some of them have the core strength in branding, some are into Product Marketing, some are more performance marketing people. And then, later on, it's about balancing the team with the skill sets that are still missing.

Q: And what is your general take on the ecosystem in the Nordics and the Baltics?

Exciting times to be in the Nordics at the stage that we invest in! I think, Finland is extremely interesting at the moment; that's our home base, so we covered it quite thoroughly. Lots of good deal flow and also lots of money in the market in Sweden, too. Norway is still, I think, not as developed or as mature as the other Nordic countries, but I'm very keen on following them more closely myself. There is some amazing tech there, but the commercialisation side and ambition to actually build highly scalable technology companies is another question. But I hope that our approach is something that can help with that.

Denmark is also an interesting market — and maybe not as crowded yet on the fund side. Our geographical focus is the Nordics and Baltics, and now we're here in Riga, in Latvia, but we could technically invest anywhere in Europe. Of course, we are a fairly lean team, so we have limited resources in terms of actively scouting and being on the ground in other countries.

Q: Are you feeling that the competition is tightening? Last year, it'd looked like new seed-stage funds launched almost every month in the Nordics.

Maybe we just look for deals that others are not that interested in, but we don't face that much of direct competition when it comes to funding rounds. It can also be that we are a bit earlier than the big funds, so we sort of act as a feeder for them.

I think it's great for entrepreneurs that there is more money available, and that the tables are turning in a way that they can also be picky in terms of who they want to be working with for the next 10 years. And also, they can challenge the VCs more in terms of what value they can bring to the table.

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