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).
Rudi Skogman, CEO and co-founder of Blok and former chief of investor operations at Slush, has been part of the Finnish startup ecosystem for a long time and witnessed it becoming one of the most interesting and unusual communities in Europe. In an interview for Tech.eu recorded by Natalie Novick at Slush 2019, he talks about disrupting the real estate sales with Blok, working as part of the Slush team, and shares his vision of the future of the ecosystem.
This interview has been edited for clarity and brevity. Listen to the conversation in full on our podcast.
Q: First, can you tell us a little bit about Blok?
At Blok, we want to replace real estate agents with algorithms, to build technology to automate the process of selling your home. It sounds simple, but it's actually quite a complex technological solution. What we're really about is building our technology in a way that actually makes the user experience better. And in the case of real estate, that means being able to combine the best of technology with the best of humans.
Things like customer service, that's still human. You as a human home seller do want to speak to a human, so we take that aspect seriously, but then all the boring, repetitive work — that's completely automated. And that enables us to do stuff that no other real estate agents would be able to do. In the past two years in Finland, we've sold about €350 million worth of real estate, that's about 1,500 to 1,600 apartments. We've basically sold that amount with four or five human agents.
Q: How did you know that there was a need for this type of technology and that the traditional real estate relationship wasn't cutting it anymore?
It really started from my own frustration towards the market. I sold, then bought an apartment through traditional real estate agents, and I didn't really like the experience on either side. I'd figured out that we were in 2015, and we had self-driving cars on the streets of San Francisco, but at the same time I was using an agent here to sell my apartment, paying her something like 4 percent in commission. In cities like Helsinki, or Stockholm, or London selling homes is actually quite easy. So I figured that there must be a way of bringing technology in here to make the experience cheaper and better. And that's where it really started.
Q: Let's talk about the technology side of Blok; what makes your solution a unique and special experience for customers?
When you look at this space in Europe, a lot of companies have started as tech companies, but quite quickly many of them noticed that it's probably easier to scale by just hiring more agents. But then you're suddenly stuck with a company that's not really a tech startup anymore, it's more like service innovation.
Our approach is to look at all the problems that we're facing and figure out how we can solve those problems by building technology instead of hiring people.
For the customer, the experience differs in that everything you're doing is completely online, everything is very transparent. You can follow, understand, and react to what's happening; when someone makes an offer, for example, you'll get it on your phone as a text message or an email. Everything is much faster; everything happens in the now.
But then on the background — and that's where the technology plays a big role — there's a lot of work that we do to sell the apartment. That includes getting a lot of paperwork and photos in, planning, making the actual ad, getting a valuation done and all that stuff. That's where we have a lot of algorithms doing the work. And then we have humans just to check that algorithms aren't making mistakes, and when we do that enough, at some point we'll be able to even trust the algorithm to actually do the work.
Q: That's the end goal, right?
Yes, the end goal is to get rid of any human interaction in that process where information is searched for, filled in, marketed, etc.
Q: You've been a serial entrepreneur for a long time and you've been really active in the Helsinki startup ecosystem for quite a number of years now. So, when it came time, when you were experiencing this problem, you were uniquely situated to innovate and build a company to solve your own pain point.
You're correct. It's my 10th year in the Finnish startup scene. I joined it when it didn't exist in many ways. When Miki Kuusi and Atte Hujanen took over Slush in 2011, I joined the team and then spent five years at Slush, building up this event. For me, coming back to Slush is always a great experience, because it does keep getting better every single year. It makes me happy to see that the stuff we built actually made sense and the younger generation is making our vision even better.
It really speaks for the Slush way of doing things where you don't have these old farts doing the same thing over and over again and trying to innovate, but actually letting the younger people come in and do it better. When I did Slush, I only did Slush; I never thought about what future connections this might create for me. But yes, you are correct, when I decided to start my startup I was in a better situation in a way that I could go and talk to more experienced entrepreneurs and investors. I had a network around me, which quite a few startup founders are still missing.
Q: Being here at Slush, it's impossible to ignore the impact of all the volunteers that have made this event possible. I think there's 2,400 volunteers now. And for a lot of them, you can imagine being in this environment is almost like a startup school.
Definitely. You can especially see that if you look at the team that organises Slush year-round, look at where those people have ended up from there. I think I've hired four or five people to Blok, I know that Volt has hired dozens of people… Smartly has probably hired another dozen. They've all ended up in this startup ecosystem — either as employees or as founders — and that's really cool to see.
This number of volunteers at Slush is a new thing, it really started in 2014 and 2015. I think in one or two years’ time we're going to be seeing a lot of these volunteers doing great things. Marianne Vikkula, the previous CEO of Slush, and Andreas Saari, the current CEO, also started as volunteers.
So, you really see that path from volunteering to working at Slush or doing startups in a bigger way. And it really works as an inspiration. All of the volunteers that you talk to at the event, they're all really, really excited to be here. They're really pumped with energy and they're really happy about being here. It's not a chore.
Q: Slush makes a major impact on the European technology landscape. Can you talk about that transition and the things that got it started? What were some of the concepts and themes that were important then and how they've changed as the organization and the event grew?
Slush is a completely different beast than what it was when we got started in 2011. Back then, at Slush 2011, I think we had four international investors. So, the first obstacle that we were struggling with was actually getting investors to come to Finland and look at the startups here. That was solved with a kick-ass event where we could show that there were interesting startups here. The investors that came talked to other investors and said that there are actually cool startups here.
On top of that, we had the rise of Angry Birds and then Supercell, which helped in a sense that Ilkka Paananen and Peter Vesterbacka got in contact with really hardcore investors and other people in the startup scene outside Finland. In my thinking, that really proves that Slush is very much a community effort. Without the community around it, it wouldn't be here, it wouldn't be like this.
What I'm happy about is that from the beginning the main idea has been to connect startups with investors and vice versa. We're sitting right next to the meeting area with hundreds and hundreds of tables with thousands of meetings going on over the course of the event. I'm really happy to see that this core element is still there, and I think it's still very much needed on both sides. But then on top of that you see so much new stuff popping up as well.
Today, there's a lot of talks about things that were not even on the agenda a few years ago, things like diversity and inclusivity. Climate change has really popped up and that's a big theme this year, including the big sustainability effort going on at the event itself.
Q: It also speaks of how tech is now everything. And as a tech event, you have the opportunity to speak about all of these major issues, bring them to the forefront, and put them on stage. And it's such an incredible platform that you have here.
It really is. The only thing that I want to try to add next year is the role of technology in solving major issues other than climate change. Of course, climate change is a huge topic right now, but there are so many other things where technology is making a big impact, like getting people out of poverty, getting people into schools, providing clean water, sanitation; all of that is connected to the tech industry and the startup ecosystem as well. There's been a few talks around that, but I think that's going to be a major thing next year.
Q: And it'd also mean continuing to scale the ambition of the company.
Exactly — but not necessarily scaling in terms of numbers, not too much. I think Slush has done a good job in not making it too big: it was 15,000 people in 2015 and now it's around 25,000 people. You could have grown it to some 35,000 in this time. But there's been a conscious decision to keep it big enough so that it's interesting but small enough so that you actually still have random encounters and meet relevant people semi-easily.
Q: Something that's always been at the forefront is that it's community-driven, and the growth of Slush and its impact mirrors in a lot of ways Finland as a technology ecosystem. As a Finnish founder working in Helsinki, can you talk about the ecosystem and what Finland has to offer for tech startups?
For me, the number one thing about Helsinki and Finland in general is that it's a small country, so the ecosystem is really small as well. But what's great about the ecosystem is that there's no competition in the field, no one is trying to get the ecosystem to themselves in any way. There's just one ecosystem, and once you're in it, you're in it for good. Everybody is in it together.
Elsewhere in Europe, cities and countries get so big that you have a dozen different organizations claiming that they are the ecosystem. And then you're torn between them. In Helsinki it's really clear, it's built around Slush and everybody works around this ecosystem.
Q: What do you think is the secret to that, what makes things different here?
It's a good question, and I don't think we have a pure answer to it. In general, it's just that we trust that the guys who are doing good stuff are actually doing good stuff, and there's no need to compete. It rather makes sense to help them make that good stuff even better, so you end up doing a lot of stuff together instead of going against each other.
I think that's really where it started at the very beginning of the ecosystem, and now it has become the universally accepted way of doing things. There are, for example, entrepreneurship organisations in every big university in Finland, but those work together on building events and developing the ecosystem, they get people from their schools to come into the ecosystem — and that's where it starts.
Q: I think what's great about Slush is that it has a chance to shine a light on this collaborative nature. And also, you have so many international startups and institutions coming here that can take that away with them as well.
I hope that they really do. I personally believe that Slush wouldn't be here without being non-profit to start with, and then being community-built on top of that. And not just community built, but also built in the way where a lot of people just chip in without thinking about personal benefits. You just do it because you want to see the team succeed.