Never Mind the Valley: Here’s Finland

Finland is quite a paradox. One would not think that a country with only 5 million people, plunged into darkness for a greater part of the year, would be the inventor of Linux, SSH, IRC, Nokia, F-Secure and MySQL. While the country is known for its technical feats, heavy metal bands, saunas, and educational system, it’s less known for its startups.

Success stories include Sulake, owner of Habbo Hotel (one of the largest virtual worlds, with tens of millions of users, and pioneers of micro-transactions several years before Farmville) and Irc-Galleria, which is the largest social network for Finns.

Guest author Ramine Darabiha is an entrepreneur and occasional blogger at Nerdstalker and his own blog. Disclaimer: He is the CEO of MySites, which also partners with Xihalife, Dazzboard, Wreckamovie and Breezetags. He will also be a mentor at Summer of Startups.

There was the $1 billion exit of MySQL to Sun, as well as Dopplr and Jaiku (the Finnish Twitter that was bought by Google and used as a basis for Google Buzz). Star Wreck was started by a group of friends from Tampere, and ended up having thousands of contributors and 8 million viewers, making it the most successful Finnish movie ever and the first major crowdsourced movie production.

The Finnish ecosystem is facing many of the same challenges as other small European countries (I’ve made a list of the 10 major ones here). There is a lack of entrepreneurs. Only 3% of the population wants to become entrepreneurs, and only a fraction of them want to create startups. Joining or starting a new venture is seen as a very risky thing, and there is still a strong stigma that people who are self-employed probably couldn’t find a “real” job in the first place.

RWW’s Never Mind the Valley series:

As is often the case in Europe, failure is perceived as extremely negative, rather than a learning opportunity. There is also a lack of visibility for Finnish startups. The local press and TV mostly ignore them, and blog coverage mainly comes from Arcticstartup, as well Nerdstalker.

Venture investments are fewer and comparatively smaller than with U.S. companies. However, there is strong government support to improve things. For example, Tekes provides grants and low interest loans to tech companies. Vera venture is a “government VC” that will follow investments made by others. There is also a program called Tuli, which gives “free money” to students to explore ideas that could become startups.

Despite the hurdles, there is still a vibrant, creative startup community in Finland. During the past year, there has been a growing number of entrepreneurship societies in the major cities. Their goal is to get students excited about startups, have them meet role models, hear stories and help them get off the ground with their ideas – and even give seed funding through government support.

The leading group is called Aalto Entrepreneurship Society, which has 5,000 members, has helped with the creation of 40 startups last year and organized excursions to Silicon Valley.

Other entrepreneurship societies include HUES, Hankenes, Boost Turku and Stream Tampere. Together, they’re organizing a program similar to Y-Combinator this summer called Summer of Startups where students can receive seed money to create a startup, rather than getting a summer job.

Photo by Skazama.

Who are the Finnish startups?

I’ve compiled a list of 30 that I find most interesting and active. Keep in mind this is in no way a definitive list. There are plenty more in stealth mode or really early stage and hopefully you’ll hear from them soon.

The big ones

  • MySites: Millions of photos, videos and documents uploaded and shared every month. Also provides cloud storage and media hosting for startups.
  • Xihalife: The world’s largest multilingual social network. Recently received 1 million euros in funding. Jyri Engerstrom (formerly of Jaiku) is on its board.
  • Muxlim: One of the largest Muslim online communities. Has received an Internationalization Award form the president of Finland.
  • Dazzboard: iTunes for Android (and everything else). One of the few Finnish startups to relocate to the U.S.
  • Wreckamovie. From the makers of Star Wreck (the most watched Finnish movie ever), a collaborative moviemaking platform. 100-plus movies in progress.

Gaming

  • Everyplay: Makers of Kamu World and Kamu Town. The founders also happen to organize Assembly, the largest LAN party in the world!
  • Ironstar: Makers of the virtual world Moipal. Graphically, think Maniac Mansion graphics meets Farmville. Funded by Monty Widenius (creator of MySQL).
  • Heiaheia: Social game mixed with exercising. Get achievements and badges for grinding in real life. Started by ex-Nokia people.
  • Huikea: Social and mobile game developer, founded by Teemu Kurppa, one of the founding members of Jaiku.
  • Relationship games: Social game for couples, where the game suggests tasks to please your partner. Game design helped by members of Sulake (makers of Habbo Hotel). Video here.

Consumer

  • Hitlantis: Spotify for indie bands. Provides a visual music discovery engine to find new bands.
  • Sofanatics: Social TV for sports. Lets you watch sports games together with friends online.
  • Widsen: Think Google PowerMeter but add RFID chips to your power plugs so you can shut down your devices directly from the Web. Winner of the Bootcamp program. Video here.
  • Foodie.fm: Smart grocery list. Tells you what ingredients to take, in which amounts. Browse recipes.
  • Bambuser: Technically Finnish/Swedish/Norwegian. Live video streaming service. Nice Facebook and Twitter integration, plus chat. Used by the number one TV channel in Finland, YLE.
  • Shobble: Makes it easier to find and rate shops to order from around Europe. Video here.
  • Lucsens: Augmented reality dictionary for Japanese and Chinese characters. Video here.

Local

  • Finderbase: Lost your keys? Found a wallet? Post it online, get rewards. Video here.
  • Eat.fi: Yelp for Finland. Find and review restaurants near you.
  • Netcycler.fi: An online place to give or trade your old stuff instead of just throwing it away.
  • Kassi. Still in private beta, no link yet. Post messages, offer services, find stuff in your community. Video here.

Services and tools

  • Scred: Manage payments for your site, association or band. Keep track of expenses, send invoices and get stats. Video here.
  • Flowdock: Real-time chat with tagging. Helps groups, bands and communities talk more efficiently. Video here.
  • Hammerkit: WYSIWYG editor for Web services. Also lets designers create Web pages from their creations more easily. Video here.
  • Breezetags: A service to share links by SMS, email and social bookmarking sites.
  • Audiodraft: Allows collaborative music creation through a Web-based audio editor. Video here.
  • Microtask: On-demand, scalable labor. Similar to Crowdflower but aimed at solving more difficult tasks.
  • Balancion: Bank account as a service? Manage your account, get stats, ditch your old netbank.
  • Gigswiz: Allows bands to find where their fans are and find a place to play their gigs, together with analytics.
  • Hipui. Still in closed beta. Developing a platform to host and stream cloud apps to any device – think Onlive or Gaikai for apps.
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