Finnish Strong: Entrepreneurial Muscle in the Arctic North
Aalto University’s ecosystem brings muscle to Finland’s growing entrepreneurship scene
In Espoo, outside of Helsinki, the entrepreneurial waters are churning thanks to new initiatives connected with Aalto University’s technology and engineering campus. In fact, the Aalto ecosystem is helping to set an exciting new course for the Finnish economy, and entrepreneurship as a whole, throughout the Baltic region. Not sure you know any Finnish startups? Perhaps you’re more familiar with solving puzzles by launching irate birds at evil green pigs.
Yes, Finland is home to Angry Birds, the worldwide gaming sensation from Rovio Mobile. And Rovio’s founders were graduates of the Helsinki School of Technology, one of three schools that now make up the newly established Aalto. However, the university’s students, faculty and staff have even bigger plans for Finland, with their sights set on an entrepreneurship future that blasts past the bird-launching, pig-crushing phenomenon.
While other universities might consider their entrepreneurship work done just by setting up an incubator, Aalto is discovering real momentum by connecting the essential dots between entrepreneurship education, access to funding, student organizations for early development, and the creation of a culture that is open to outsiders. One catalyst for the Aalto entrepreneurship explosion is the intense passion held by students. “We were interested in building companies and changing things,” says Kristo Ovaska, founder of the Aalto Entrepreneurship Society (AaltoES). “We saw the need for something that wasn’t there.”
AaltoES was founded in 2009 as a privately funded, student-led initiative that focuses on building a startup community, not just for Aalto, but also for Northern Europe. Ovaska and his colleagues dreamed of a Silicon Valley-style culture in the Nordic region, a culture that offered students with big ideas the resources and mentorship to create cutting-edge startups in Finland. But when AaltoES was quickly inundated with requests for space from startup teams, the need for an additional organization became clear.
With some seed funding and access to space from the university in 2010, the Aalto Venture Garage (AVG) opened as a co-working space within the Aalto community. Participants in the Aalto Venture Garage work side-by-side with other teams trying to develop and iterate on their products and ideas. Along with their interactive (and attractive) co-working space, AVG has also created Startup Sauna, a self-described “Y-Combinator-esque” accelerator program that identifies promising startups from throughout the Baltic and Nordic regions, and brings them together for an intense six-week entrepreneurship boot camp.
AVG participants also gain access to leading entrepreneurs and educators who provide mentoring and guidance. Some of these educators include faculty and researchers from Stanford University, as part of a partnership between Aalto and the Stanford Technology Ventures Program (STVP), the entrepreneurship center at Stanford’s School of Engineering.
“The students [love discussions] of risk-taking and learning to fail fast. The young people are looking for ways to make cultural changes in their country that will open it up to more entrepreneurship.”
During a teaching trip to Aalto, STVP adjunct faculty member Donna Novitsky saw the excitement that Aalto students have for different aspects of entrepreneurship. “The students loved the discussions of risk-taking and learning to fail fast,” says Novitsky. “The young people are looking for ways to make cultural changes in their country that will open it up to more entrepreneurship.”
While students can drive passion from the ground up, the secret sauce to building a thriving entrepreneurial ecosystem also requires real support from institutions and the larger society. This is where the Aalto Center for Entrepreneurship (ACE) comes in. Established in 2010, ACE seeks to pull more ideas out of the Aalto community and help them to see the light of day as new products and companies.
ACE serves as a one-stop shop for the teaching and research of entrepreneurship, technology transfer assistance, intellectual property management, and early-stage startup support. According to Will Cardwell, who leads the Aalto Center for Entrepreneurship, the center is tackling issues of great importance to Finland. ACE’s activities, and its 15-member team, are funded approximately 60 percent by Aalto University and 40 percent by TEKES, the Finnish Funding Agency for Technology and Innovation.
“The nation needs to speed up the commercialization of technologies to capture more long-term value for both Finnish society and the global society,” says Cardwell. “We’re trying to create fans — corporate, investors and other stakeholders who are interested to interact with the innovations and startups that come out of Aalto. And we’re also seeking to get more Finns to think entrepreneurially.”
“We’re trying to create fans — corporate, investors and other stakeholders who are interested to interact with the innovations and startups that come out of Aalto. And we’re also seeking to get more Finns to think entrepreneurially.”
This point takes on deep significance in light of current trends in the Finnish economy. The longtime flagship of the Finnish technology sector, Nokia, is still struggling to find its footing. At the same time, the mobile gaming sector is taking off fast, led by Rovio’s bird-flinging success. Cardwell clearly sees Finland’s challenges as new opportunities for Aalto-based entrepreneurs.
“As market demands and employment levels are in transition, our idea is to encourage and attract talent to bear on the creation of new startups and the powering of current ventures,” says Cardwell. “At Aalto, we want to be a platform for the rest of the country, and ultimately for the whole region.”
Working with a multimillion-dollar budget and significant support from the Finnish government and the private sector, ACE is looking at business proposals from inside and outside Aalto, including founding teams and ideas emerging from the Aalto Venture Garage. From the past year’s 300 proposals to ACE, 60 percent came from Aalto’s paid researchers and 40 percent came from Aalto students or parties outside the university. This dynamic mix reflects Finland’s interest in being perceived as a welcoming center for developing new ideas in Europe.
“We need to be competitive in Finland to create the type of environment where companies would want to develop,” says Cardwell. “No matter where a startup chooses to plant itself, Aalto’s commitment to being open allows us to put our best foot forward.” Proposals identified for support by ACE travel through a multi-level funding process, progress in which is determined by market size, concept feasibility and intellectual property opportunities. At every stage in the process, each idea must show improvement around these factors to move on to the next level of funding. “We’re very ready to fail with these projects in the early stages, if they’re not hitting on these attributes,” says Cardwell.
Some projects will be identified for “fast track” development and be connected with large corporate partners, such as Nokia and Microsoft. Others will continue forward in the evaluation and development process within ACE. The center seeks to develop a portfolio each year that consists of at least 15 startups, 15 new patent families and a growing set of intellectual property licenses that will produce regular revenue to fund the next wave of startups.
“Finns can be stubborn and independent, so they avoid mimicking others. They often don’t really care what others do. I think this independence is a fundamental characteristic for entrepreneurs…”
Stanford Management Science and Engineering Professor Riitta Katila, a native of Finland who teaches a popular course on creativity, innovation and change, sees entrepreneurial advantages in the national mindset. “Finns can be stubborn and independent, so they avoid mimicking others. They often don’t really care what others do,” says Katila. “I think this independence is a fundamental characteristic for entrepreneurs…” While no perfect system exists for establishing an effective entrepreneurial ecosystem, the laser-like focus of the Aalto community points to hot times for entrepreneurship in the Arctic North.