In addition to finding co-founders, smart startup entrepreneurs surround them with experienced people. Good advisors and board members can make the difference between a successful and failing company by guiding the founders with their hard-won experience and connecting them to others in their extensive networks.
Here are a couple of places to start looking for a mentor, advisor or board member in Finland – or to find a company to offer your mentoring for.
Boardio – A platform of 2500+ advisors, mentors and board members. No technical limits for geography, although most if not all members are interested in Finnish companies.
Yrityskummit (Business Mentors) – Free voluntary business mentors. Organized in regional chapters across Finland.
Nestor Partners – Experienced veterans of multiple industries, offering at least one day of free mentoring for free, and further mentoring upon agreement.
Hallituspartnerit – Experienced board professionals and other mentors. They’re a close partner of the Certified Board Member training program. Unfortunately their website is only in Finnish, but they’ll likely be more than happy to help people in English as well if you reach out through their contact page.
Great co-founders can be found in many places. You’re typically looking for a person with specific skills who is also interested in building a startup, and you rarely find large groups of people who have both.
Startup events and groups have people interested in startups, so you have to find a suitable one for your startup who has what your team needs. Domain-specific groups, like developer networks or circular economy events, have plenty of people with the skills and interests you might be looking for, and you’ll have to find the ones interested in joining a startup.
Here are a few places where you can start looking for a co-founder for your startup.
General
The Hub – You can post a job ad for a co-founder for free. This website has a lot of visitors. Unfortunately posting is for companies / teams only; you can’t post an ad of yourself as an individual person looking for a team.
Kiuas Inside – A platform made for co-founder networking by a local non-profit accelerator. They have 100+ profiles already, but you can’t browse those without signing up.
Stealth – The brand new successor of Founder2Be, which was a big and old global platform. Their tagline: “Discuss ideas, find co-founders, get startup resources, connect with freelancers, and more.”
Icebreaker – Icebreaker VC organizes a lot of activities to bring promising co-founders together, such as the Pre-Founder Project. This helps co-founders meet and get things going, and the nice investors at Icebreaker to be the first to get into discussions with many new startups.
Pre-covid, NewCo Helsinki ran In Search of Team Members events on a monthly basis. Who knows, perhaps these will continue soon in Startup Space Helsinki?
I listened to two great podcast episodes today on scaling and market entry. I like to write and rewrite the key points I’ve learned to understand them more thoroughly. Both podcasts were in Finnish. Here are my key takeaways in English:
Product/market fit: Identify a sector and approach that has demand
Business model. Ideally with good unit economics. Some companies skip this and start only with a hypothesis that they start validating later, after some scaling (risky)
Scalability model. How to really grow the company
Every new country for Wolt undergoes surprisingly many steps from scratch, although not necessarily the above ones. They make use of the technology built and lessons learned from previously conquered markets, but they will have to get clients, restaurants, and delivery people starting from zero, and with a different culture, competition, legal and other aspects of the environment.
Business model development stage varies a lot between companies. It’s about unit economics, how does it scale. If it does, it’s a question of how big is the sector, which leads to how much should you raise capital and how fast to grow. The bigger the sector, the higher likelihood that someone is going to grow fast there, so the faster and better funded you need to do it.
The above were from the last few minutes of the podcast. There were many other interesting points earlier. Here are a few of them.
Efficiency of raised capital
The aim of startups is to build more value than the money they’ve raised and invested. The more value for investment, the more efficient company.
There’s a rule of thumb for 1/3. That is, after scaling, the capital you raised along the way should account for less than a third of the company’s value.
For example, if you’ve raised €15B and your company is now valued at €50B, 30% of your value is the capital you raised. This is not bad, but not very efficient either.
Many later-stage investors are very interested in this efficiency of raised capital to value created. The more value you create for every euro invested, the more interested they will be in investing into your company.
You can also backtrack from your potential company value to the amount of capital to raise. If the market size and competition mean that your company could realistically be valued at €100M, you will have a much easier time attracting investors if your realistic plans seek for a total of €20M than €50M down the road. One creates five euros of value for every euro invested, the other only two. All else (like company stage and risk) being equal, the less efficient one is the far less interesting for investors.
On the other hand if your company could be a ten-billion-euro one, a €50M total funding goal would be just 0.5% of that. This would be extremely effective and make for a theoretically attractive investment opportunity. However, it might not be enough considering the likelihood of plenty of other players entering such a huge market with bigger budgets to compete with. Your sales will not be very high if your competitors will be able to offer similar solutions much earlier and with better marketing everywhere on the globe.
Scaling to new markets
Miki mentioned that after reading the early parts of Blitzscaling he noticed he had a different view on some aspects of scaling. To simplify, his impression was that blitzscaling means the extreme approach of going fast and breaking things while entering new markets. Uber is a prime example of this, having entered dozens of countries with the same operating practices, regardless of whether those practices were appreciated or even legal in the country. This is highly inefficient for almost anything other than raw speed of market entry. While there are benefits for being the first in a market, there are huge losses to be done with ill-advised market entries.
The approach Miki had learned from his mentors was to first build a scalable operation in one market, and then expand it one market at a time. Every market will be different, and some things you did in the previous markets won’t work in the next ones. By entering many markets at once you would be multiplying your mistakes, so better enter only one or very few at a time.
As a testament to Wolt’s approach, they are now operating in 23 countries and almost 100 cities. They’ve grown faster in every new market they have opened due to learning from all of the previous ones.
Comparison: Goodio
This is very similar to what Jussi Salonen, Goodio‘s head of US said in the episode of the Puttonen & Vilkkumaa podcast I listened to today. They talked about three different countries where they’re selling their chocolate now: Finland (their home country), US (the most competed market in the world) and Japan. The markets work very differently.
In US, consumers want packaging to be big and to contain as much product as possible. In Japan, packaging should be small and it’s not expected to contain very much of the product. It’s more important that it’s kawaii, cute. Another person on the podcast (Vilkkumaa) added that the associations with colors and packaging are also very different. For example in Japan people prefer golden color in packaging. Some traditional Finnish chocolate packages were not regarded highly due to their similarity to Japanese tobacco packages, and others were similar to that of a non-edible product (rubber bands or similar). The markets have other differences as well, such as wholesalers and other partners playing a much bigger role in how your FMCG product succeeds in Japan than in the US.
Using an approach that worked for one country they would have had big difficulties in another of these markets. They’re still producing the same chocolate with the same value-based story (radical openness in the food industry; knowing where your food comes from and where it’s made) and branding, but with many adjustments in how it is offered in each market.
Must-win markets
Regarding market entry, Goodio realized in the beginning that the Finnish market is not big enough for them, but the US is and they had experience there. They chose US as their must-win market and made sure their products were appealing to US customers and retailers.
It took them two years to get the deal with Whole Foods in the US, and some additional hassles to sort through before getting their product on Whole Foods’ shelves. As this was a must-win market, they might not have been able to afford conquering Finland and only then starting the long process of entering the US market.
Wolt vs. Goodio strategies
As a thought experiment, let’s take an imaginary setup that might be similar to what Goodio faced:
A US market team costs €1M/year and it takes them two years before first sales, which quickly ramp up to €10M/year in gross profits
A Finnish market team costs €100k/year and takes a year before first sales, which quickly ramp up to €500k/year in gross profits
The HQ expenses will be €500k/year
Alternative strategy 1: Focus on the Finnish market first, start to enter US market after first sales in Finland.
Alternative 2: Go into both at once.
Alternative 3: Go into the US only, forget about Finland.
Total differences (not annual):
After 1 year
After 2 years
After 3 years
After 4 years
After 5 years
Alt. 1 gross profit
0
500k
1,000k
11,500k
22,000k
Alt. 1 fixed expenses
-600k
-1200k
-2,800k
-4,200k
-5,800k
Alt. 1 net
-600k
-700k
-1,800k
7,300k
16,200k
Alt. 2 gross profit
0
500k
11,000k
21,500k
32,000k
Alt. 2 fixed expenses
-1,600k
-3,200k
-4,800k
-6,400k
-8,000k
Alt. 2 net
-1,600k
-2,700k
6,200k
15,100k
24,000k
Alt. 3 gross profit
0
0
10,000k
20,000k
30,000k
Alt. 3 fixed expenses
-1,500k
-3,000k
-4,500k
-6,000k
-7,500k
Alt. 3 net
-1,500k
-3,000k
5,500k
14,000k
22,500k
All three of these scenarios are good after five years, but have plenty of differences both then and along the way.
Alternative 3 is the simple one. You go for the big market and minimize other complications. However, you need a lot of capital, and this might require a big part of your team to be based in the big market to keep your learning speed high. It’s always easier to learn about a market when you’re in there.
Alternative 1 is almost as simple. You start with just one market, but it’s your small local one. You have fast learning with minimal costs. Unfortunately your company won’t get profitable there, only once you’ve conquered the big market, which is delayed in this strategy. Goodio said they avoided this to avoid the danger of optimizing their product for the small market, and because they had the expertise and resources to go after their must-win market right away.
Alternative 2 combines both of the above. It has almost the same expenses as going after the big market alone. It’s a bit more complicated to manage, but you can learn things about your product from two markets at once, which makes it easier to expand into new markets once you’ve conquered the must-win one.
Goodio chose strategy 2 of going after their must-win market and tiny home market simultaneously. Wolt chose strategy 1 of sticking to their home market and expanding only once things were going well there. They faced a different situation than Goodio in both numbers and otherwise.
One aspect is fundability: it’s likely that once Wolt proved good unit economics and scalability in Finland, their funding opportunities increased significantly. Also, conquering a new market requires much more of that funding when you have to build a new multi-sided network of clients, restaurants and drivers in each country and city, compared to when you can make one deal with one retailer and start selling chocolate nationwide.
As a startup coach I often help companies to start selling efficiently. Here’s one of the key takeaways I share about contacting new clients, especially online: Keep it extremely short and to the point.
…
That’s it. There’s not that much more to it. This applies to surprisingly many areas of life, but is especially true in B2B sales. Businesspeople like those who respect their time by telling the relevant things without unnecessary complications. This does not mean forgoing good manners or not taking the occasional moment to connect on non-work topics. The important thing is that when discussing work topics, time is spent productively.
For those who want to read up a bit more on my experiences regarding this, below are a few other observations I’ve made along the way. I’ll start with a recent example of mine where I did what I often do, introducing two people to each other. One was a top executive of a stock-listed corporation and the other was a startup looking for their first pilot customer, struggling to get corporations to pay them attention due to a lack of track record, experience and a number of other factors working against most startups.
How to approach new clients online
This is the message I sent in its entirety:
“Hi Jane and Mark,
Happy to connect you. Mark’s startup X manufactures Y with N% less labor and up to N% less materials.
Jane, this could be interesting for Z Corporation. Who would be the right person to talk with about this?”
Jane replied within 10 minutes, connecting Mark with an EVP (executive vice president) to discuss this further, and added her own thoughts on the potential relevance of Mark’s solution.
The key here is everything that you leave out. I didn’t mention anything about the numerous other benefits the startup’s solution offered. I originally tried them in the email, starting with the six benefits the founder had mentioned in an email to me. It was a good message from a founder to mentor, but for a potential customer whose job is not to help you, the shorter the better.
Writing a good opening message is like making a pocket-size sculpture to be sold as a souvenir: the goal is not to include as much marble as possible, but rather to keep the least amount that is needed to make it an attractive piece that catches someone’s eye and they can easily handle (for a souvenir: to carry; for an email: to respond).
How not to approach new clients online
“Hello, we are a team from somewhere, seeking to do something and something else and a few other things too, and we have a process that technically speaking mumbo jumbo and it’s special because chemical reaction mobile phone app hydrocortisol engineering lorem ipsum…”
… going on for 5 paragraphs.
These almost never get responded to. One founder sent ten of these, and got one response asking for a simplification of the key points. I ask a lot of these myself. Founders are often fascinated about their idea, but the buyer is only interested in the benefits they’ll get. Only if the benefits are clear and attractive enough, they start to care about other factors, such as price.
Information layers
The layered way of giving information is simply that you give a top-level view first, and more nuanced information later, in stages.
As an example, you can imagine how you would behave when buying something, let’s say an apartment. You wouldn’t likely be interested in what kind of material are the window frames made of, and if the salesperson would start by droning on about such minor details, you would feel like they’re wasting your time and not a good person to do business with. You’ll appreciate much more if the salesperson tells you only the information that you’re most likely to be interested in, and goes into the nitty-gritty details only when you ask them to.
Becoming clairvoyant
If you initiate many similar discussions over time, you’ll learn to recognize the signs of when the other side becomes interested in the next layers of information. When this happens, you will be able to offer them that information right when they were about to ask for it. When done tactfully, this can leave a very positive impression that you understand them and are a good person to do business with.
Start new B2B client relationships by telling them the few things that they might find most attractive about your product, and suggesting the next step, like agreeing on a time for a phone call. Keep it short and keep it relevant.
A part of what I do is matchmaking connections between startups and investors. I meet dozens of startups every month, sometimes that many per day, and introduce the investment-ready ones to investors whose investment criteria they fit in. This was doable by memory alone at the point when I knew about twenty investors. After meeting 50 new investors in one day (thanks, TechChill!), I knew I needed a more systematic solution for matching startups and investors.
I took two weekends off from other hobbies (thanks, coronavirus!) and made an investor search that is open for everyone. It’s now available at ecosystem.fi/investors.
The search works in a different way than most people imagined an investor search should, as some of the seemingly obvious choices turned out to be less than helpful, and much better alternatives were found. I’ll explain the reasons behind the most significant design choices next, followed by content choices, how to get new investors added, future plans and a glossary of terms used.
Why is there no filter for sectors/industry verticals?
This has been the most common question during the testing rounds. The short answer is that I haven’t found a way to make a sector choice useful as a search filter.
The search works by showing you all the matches except the ones excluded by your search criteria. If you don’t select any criteria, you’ll see all the investors. If you select that your company is based in Finland, you’ll see only the investors who invest into Finnish companies, as the search can safely exclude those who don’t.
This works for all the criteria where investors have clear boundaries beyond which they do not invest. Most investors don’t exclude any industry verticals out. For example Helen Ventures could invest into anything that is energy-related enough, Butterfly Ventures in anything that is hardware and deep tech enough, and Icebreaker into anything with substantial domain expertise. Knowing a company’s industry wouldn’t help exclude almost any investors, so it wouldn’t be useful as a search filter.
Investors’ preferences and criteria that didn’t make it to the search filters are described on every investor’s profile page.
The goal of the search is to give you a shortlist of investors whose hard investment criteria your company fits in. Using any search filters is voluntary and you can play around to see who would be interested in your company after you reach milestones or make some changes. You can see all the investors by not using any filters, which is the default view.
Which investors are included?
Investors that I know personally. This is to ensure the accuracy of the results. I’ve checked everyone’s investment criteria directly with them to ensure the information is as correct as possible. As a result I can also introduce you to any of these investors directly.
I’m adding new investors every week after getting their investment criteria and preferences.
Could you add investor X?
I’d love to! The only requirements are that they want to be added, are actively making new investments into related startups, and have a moment to chat with me to make sure I get their information down correctly. Here’s the contact form.
I focus on investors investing into North or East Europe at the moment, but will be happy to add others into my list to follow up with as soon as I’ve got this region covered.
What about a filter for the funding round name? Seed, Series A and so on?
I’ve thought about making a separate blog post on these, but for now I’ll answer this shortly here. The problem with funding round names like pre-seed, seed, series A and so on is that everyone uses wildly different definitions. If you put two startups and two investors in a room, you’ll likely have four different definitions on what is an A round and how it differs from a seed round. Using them would add more confusion than clarity to the search results.
Funding round names are mostly used as rough approximations for the startup’s actual situation: revenue, product readiness level, amount of funding sought, and so on. These are more clearly defined and help create more accurate search results, so I’ve decided to use these.
What about other investor lists?
There are excellent alternatives to this list, some of which include a search function. I recommend you to make full use of them as well. For example Finnish Venture Capital Association lists approx. 80 funds in their filterable member list. A limitation of that list is that it doesn’t include funds based outside Finland, so it doesn’t include all the funds who invest into Finnish companies.
The reason I made a new one was to serve my own needs. Due to my background in web development it didn’t take me long to prototype my way onto the current solution that fits my use case remarkably well. A number of people have said this helps them a lot as well, so I decided to make it open for everyone and continue to develop it based on feedback as best I’m able.
Some of my main criteria were that I wanted an investor list that was international, had clear and precise filters, and wouldn’t require you to log in. Other criteria included being helpful even with partial information (all the search fields are optional) and so fast that it’s convenient for repeat users like myself.
What are your future plans? Want to cooperate?
I love cooperating and getting feedback! Please let me know what you think of this and how this could be improved.
A bunch of ideas have already been presented on potential next steps and I’d love to hear more and discuss about them with people who have similar interests. You can reach out to me through the contact form or join the discussion in the #investor-db channel in Startup Helsinki Slack.
Some of the improvements ideas for the investor search include:
Better mobile support (placing filters under each other on narrow screens)
Display the investment criteria on each investor’s page (another priority)
A visual effect to see that the filters results have been applied
A search button (not needed as the filters are applied instantaneously, but some have said it might still be nice to have a decorative button)
These are some of the ideas that have come up on other things that could be made searchable:
Public funding instruments
Accelerators’ application periods
Piloting project application periods and ongoing opportunities
Incubators
Other ecosystem organizations
Some of these could use almost the same structure as the investor search. Some could benefit from search options that weren’t helpful in the investor search, such as industry sectors.
Media (newsletters etc.)
If you’d like to mention this in media (including newsletters) and would like my comment on it, please let me know through the contact form. I have some material ready that can be helpful in writing about this.
Glossary
Terms used on the search form:
Term
Explanation
B2B
Business to business
B2C
Business to consumer
B2B2C
Business to business to consumer (sell to intermediary)
B2G
Business to government
SaaS
Software-as-a-Service
Deep tech
Technology that provides competitive advantage by being significantly better than alternatives and either IPR protected or very costly to imitate.
Marketplaces
Platforms connecting buyers or sellers, or other kinds of parties. Their value is in their network more than technological advantage.
Based on what I’ve read on the corona virus in the last two days, the situation is far more dangerous than we have realized. In short: we should minimize the number of people we spend time with to avoid massive death counts this spring. Start working remotely if at all possible. Here’s why.
You can get an infection from breathing the same air with an infected person or touching them. As some people still have the habit of sneezing into their palms, it may be possible to get an infection from touching something an infected person touched recently, such as a door handle or a food ladle in a lunch buffet.
You have no way to tell whether you or someone else is already infected, short from doing a full test. Covid-19 is transmissible before symptoms appear.
Approximately 10% of the infected need intensive hospital care for 3-6 weeks.
Because of the high infection rate, hospitals run out of capacity fast. People will start dying from more causes than just covid-19 if we run out of doctors and nurses to perform urgent heart surgeries and other operations. Northern Italy went from zero to that in three weeks.
Most of the infected people have mild symptoms or none at all. They will still infect other people if they continue business as usual.
This is all based on what we know of the situation as of this morning. New information comes in daily, but we’ve already reached the point where we need to take significant actions to avoid further catastrophes like in Northern Italy, Iran and Wuhan. The numbers on confirmed cases of infection lead to a false sense of security. Regardless of whether we have 2 or 2,000 infections so far, the real question is who did the infected ones spend time with in the last two weeks? And in turn, who did those people spend time with?
If an infected person attended a 100 person event, and several other participants attended other 100 person events next week, the number of infections may have just grown hundredfold in a week before anyone developed any symptoms. Many cafeterias have anywhere from 15 to 150 people eating lunch at the same closed space for 30-60 minutes. Team meetings may have a dozen people sitting in the same small room for more than an hour. Traveling puts groups of people in the same closed space for hours at a time.
As we have no way of knowing who’s infected, or whether we have been infected ourselves, the safe course of action is to minimize the number of people you spend time with in closed spaces. The virus lives as long as it can infect new people. We can kill it by starving it of opportunities to spread.
We can react either early or too late.
Sources and more information
Michael Osterholm’s explanation was instrumental in helping me understand that covid-19 is not just serious, it’s deadly serious. It may cause a cascade of horrible effects like running out of life-critical medicines if we don’t act quickly. The delayed responses so far have caused us to fail to prevent it from becoming a pandemic, but we can still prevent countless deaths by acting quickly and decisively.
A second, shorter clip answers questions like why hand sanitizing and surgical face masks are helpful but far from enough:
A doctor in Northern Italy describes how they fail to keep many people alive because the number of patients far exceeds the capacity of the medical staff. People are dying from more causes than just covid-19 as there just aren’t enough doctors, nurses and premises to provide life-critical care for everyone. https://threadreaderapp.com/thread/1237142891077697538.html
Why community reaction makes all the difference: https://www.fast.ai/2020/03/09/coronavirus/. For example, compare the results of St. Louis’s swift and decisive response with those of the “business as usual” approach of Philadelphia at the outset of the flu pandemic of 1918:
I haven’t seen a confirmation yet, but it seems likely that it’s transmitted through droplets. The air we exhale is full of tiny droplets of liquid. Because the virus lives in our lungs and throats, it’ll be attached to these droplets. These droplets are exhaled through our mouths and noses and will end up anywhere we are facing for up to almost 2 meters (6 feet). When we sneeze, these can travel much faster. The virus will end up anywhere we breathe on: keyboards and keypads, door handles, buttons, everywhere. We don’t generally pay attention where we breathe to, and even if we did, air currents like ventilation can make it impossible to see where the invisibly small droplets we exhale really end up on.
The air we exhale goes through our noses and mouths and ends up anywhere near them. Our noses are pointed directly at our upper lip to start with. We also touch our faces surprisingly often without noticing it, 20 times an hour according to some studies. As a result our hands are like a train station for viruses, letting viruses transmit to everywhere we touch. We don’t know how long does the virus survive on surfaces, so the safe option right now is to minimize touching items that have been touched or breathed upon recently. Even if the virus survives only 5 minutes on a surface, that’s plenty of time for people to touch the same door handles or elevator buttons as the previous person.
In short, if we inhale the air someone else just exhaled, or touch anything someone touched or breathed on recently, we may get infected. The safe approach is to minimize spending time in the same space as other people until we know for sure what exactly is safe and what isn’t.
Will face masks help?
It seems likely that they do help, especially when worn by people who are infected. The same applies to not just covid-19 but all infectious diseases residing in lungs, throats or mouths and transmitted through droplets or air. A surgical mask aka. “the basic face mask” was made to prevent saliva and droplets from going from medical staff’s mouth and noses into the open wounds of surgery patients. The smallest droplets may go through, and air still goes around the sides, but they seem to significantly decrease the number of droplets transmitted from the wearer to other people and surfaces.
Surgical masks get wet over extended use, and you should avoid touching the wet parts or wash your hands thoroughly right after you do. There are early indications that extensive use of surgical masks may be one of the reasons why Taiwan was one of the best countries in limiting the spread of the disease.
Surgical masks seem extremely underutilized and misunderstood outside Asia. We might have a lot less influenza and common cold cases if people started wearing surgical masks in public when they have flu symptoms. Last year there were 34 million cases and 20 000 deaths from these causes in the US alone, with many people losing a month of productive and happy time to these illnesses. This coronavirus pandemic is a good wake-up call to improve our best practices in limiting the spread of all kinds of respiratory infections.
What’s the purpose of this blog post?
It’s a personal summary for myself and people I interact with to speed up conversations. I spent hours reading on the topic and this was the most efficient way to communicate the key findings to other people.
It might be self-evident, but just to be extra clear, this is not anyone’s official view and nothing here is in any way final. New and better information will arrive in due time and likely significantly change some parts on what we’ve thought until that point.
The idea behind emission compensation is that responsible companies want to pay for the reparation of the environmental damage their operations cause. The main focus has recently been on carbon dioxide (CO2) emissions, which are the main contributor for global warming. A company that compensates their carbon emissions becomes carbon neutral. This means that as a client, you won’t be contributing to global warming when you use their services.
Here’s a list of carbon compensation services for companies in Finland and elsewhere. Many of these also offer services for individuals in case you’d like to compensate something that wasn’t yet compensated, or if you just want to help in climate conservation in general.
