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Entrepreneurship and Innovation

A panel discussion at Stanford University: Entrepreneurship and Innovation in the Nordic Region vs. Silicon Valley - Are there lessons to be learned from each other?

L-R: Michael Kelly, VC investor, who considers the event a modest reality check of differences between the Nordic region and Silicon Valley; Per Holmberg, Silicon Viking member; Donald Steiny, Company advisor
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SACC-SF/SV had the opportunity to visit a panel discussion hosted by the Silicon Valley-based organization, Silicon Vikings, and VINNOVA, the Swedish Governmental Agency for Innovation Systems. The panel discussion “Entrepreneurship and Innovation in the Nordic Region: Are There Lessons to be Learned for Silicon Valley and Vice Versa” took place at Stanford’s Wallenberg Hall on August 1. The panel consisted of a broad spectrum of experienced entrepreneurs and venture capitalists.

Risk versus fear
The panel discussion revealed the differences in the business structure and mentality in the U.S. versus those in the Nordic countries. For example, in the Nordic region an entrepreneur often assumes all the risk for a start up company; in the U.S. other stockholders, such as law firms, often share the risk with the entrepreneurs, exchanging legal advice for stock options in a newly started company. Other differences include the factors that motivate entrepreneurs. In Sweden hard working entrepreneurs are to a great extent driven by the fear of being unsuccessful, while in Silicon Valley entrepreneurship is more about passion than fear, claimed panel member Jonas Berggren, CEO at CSE Incubation, Chalmers Institute of Technology. Panel speaker, Jan Linden, VP of Engineering, Global IP Solutions, agrees: “If a start-up company in the Nordic region files for bankruptcy it’s seen as a personal failure for the founders and it will become significantly harder for them to raise money for a new project, while in the U.S. people also tend to focus on the experience an entrepreneur gets from a failed project.”
“But then again, the supply of venture capital is also much larger in Silicon Valley than in the Nordic region and the amount of potential investors much higher [fund raising for a new project thus becomes easier]," Berggren continued.

Risk versus gain
The panel also discussed that Nordic students seem to avert risk more than their U.S. counterparts. According to a recent study, 70% of U.S. university students want to become entrepreneurs when they graduate, while in Sweden an entrepreneurial carrier is less attractive.
High taxes and inflexible taxation rules are other issues that affect the entrepreneurial spirit in the Nordic region and especially in Sweden, according to the panel. “Stock options is the glue that binds employees to a company, but Swedish taxation rules make it hard for start-up companies to offer stock options to employees and stakeholders,” noted panel member Magnus Ryde from Quan Ventures.
In summary, the panel concluded that the Nordic region can learn a lot about entrepreneurship from the Silicon Valley but that there are many cultural differences between the two areas that may take a very long time to overcome. However, the panel also points out that Silicon Valley is getting more and more competition from emerging market countries such as India, China, and Russia.

Several people in the audience and panel members were asked what they thought of the event.

Per Holmberg Silicon Viking member:
Mr. Holmberg visited the event mainly for networking reasons; he has been a member of Silicon Vikings for many years. The primary point Holmberg will take from the discussion is that many things seem to work differently in Sweden compared to Silicon Valley, but Sweden seems to pick up on trends from the area and to become more like Silicon Valley every day.

Jacob Vendle Marketing/business developer:
Mr. Vendle has been a member of the Silicon Vikings for several years, and like many others, he visited the event for networking reasons. He found it very interesting to hear that the high taxes are still an issue for Swedish entrepreneurs. Vendle added that he learned that the Swedish entrepreneurial spirit needs to improve in for order for Sweden to maintain its status as a high tech country.

Eero Teerikorpi CEO and Founder Continuent, panel member:
Mr. Teerikorpi has worked in Silicon Valley for 15 years. “There is no magic bullet to increase entrepreneurship in the Nordic region,” he says. It takes a long time. In the Nordic region people only start a company once. Here in Silicon Valley you have the cycle. You start once and exit, start another and exit. After that you start with others or become an angel investor. That kind of cycle seldom happens in the Nordic region.
Teerikorpi has stayed in Silicon Valley for so long because of the business climate, the California lifestyle, and his family connections here. He emphasized the importance of being established and having local contacts, a process which he suggested takes about three or four years.

Michael Kelly VC investor:
Mr. Kelly visited the function to get a Northern European perspective on entrepreneurship. He has spent 20 years abroad working in different countries such as Germany, China, and Estonia. Kelly thought there was more dialogue than expected between the panel and the audience. He noted that the views of the panel didn’t differ from what he already believed himself, but the meeting was useful as a modest reality check.

Donald Steiny Company advisor:
Mr. Steiny said he had a strong affinity with the Nordic region after recently spending time at a Finnish university. “Meeting and learning from people with different backgrounds is the best way I can spend my time.” He has high respect for the knowledge and education of northern Europeans.
Steiny was really pleased with the discussion but wanted to add that from his point of view the panel consisted of too many people, which could be considered by the organizers for their next event.

Mateo Santurio X/Seed Capital (Silicon Valley) and Business Advisor at Uppsala University Holding Company:
“I will work at X/Seed Capital Management, a company managing a fund for seed investments of early projects and companies,” Mr. Santurio said. He visited the panel discussion in order to get a general understanding for entrepreneurship in the U.S and to make contacts that can be of value in future projects.
Santurio pointed out that it’s important to understand that there are some major cultural differences between Sweden and the U.S. “What works in Silicon Valley doesn’t always work in the Nordic countries.” He also thinks that it is important to make some changes in the education system to encourage students to think in more entrepreneurial ways.

Written by Jonas Lonnqvist, Jonas Fogelberg - SACC SF/SV

VINNOVA aims to promote growth and prosperity throughout Sweden and abroad. For more info, see www.vinnova.se
SILICON VIKINGS is the interface between high tech in northern California and the Nordic region — a collaborative business networking organization for the technology sector in Silicon Valley. For more info, see www.siliconvikings.com

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