How Sweden propels local startups to global success - interview with SUP46

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We were able to sit down with Elin Hammarberg, the communications manager of the largest tech community in Sweden - SUP46.

Sweden is a northern country on the Baltic sea, with a cold winter climate and long summer days that stretch well into the night. Similarly to Latvia, they are quite removed from arguably the largest startup and technology market - the US. Yet they've consistently been able to put out successful startups that break the international barriers to provide world-class products. Some that you might have heard of include Skype (under the leadership of Swede Niklas Zennström), Spotify, King (creators of Candy Crush), Fishbrain (crowdsourced fishing app) and ecommerce platform TicTail.

We were able to sit down with Elin Hammarberg, the communications manager of the largest tech community in Sweden - SUP46. It stands for “Start-Up People of Sweden”, and 46, because that is the country's phone code.

Elin walked us through what the Swedish do differently, and why they're able to successfully and seemingly easily break through national barriers to enter the global tech scene.

First things first, how did SUP46 come to exist?

SUP46 was founded in 2013 by Jessica Stark, Sebastian Fuchs and Nathalie Nylén. Before that, the startup and tech scene was quite fragmented. There was nowhere to naturally gather, if teams needed to meet, if investors came to the city, there was no location where the community could come together. The startup scene was moving growing rapidly at this point and an open meeting place was needed, and so SUP46 was created.

Tell us about the state of startups in Sweden. Are they abundant? Is it popular to make startups?

The startup ecosystem in Sweden is really sizzling and it is constantly increasing in size. Today there are several really interesting clusters to look at, not only Stockholm but for instance Malmö, Gothenburg and Linköping have a lot of high-quality startups and various players driving the development forward. SUP46 stands for Start-Up People of Sweden (46 being Sweden’s country code) and we accept startups from all over the country as members. We currently have 60 member companies and 90 alumni they are based in Stockholm, Malmö, Gothenburg, Linköping, Uppsala, Umeå and Lund.

Entrepreneurship in general is increasingly popular and a lot of students today want to start their own company rather than become an employee.

Do startups in Sweden aim for a local target market, or do they look globally?

The market size of Sweden is in comparison quite tiny, which is beneficial. We are a relatively small country filled with early adopters and tech-savvy people (thanks to for instance early tax subsidies on home PCs) with a great design and engineering culture – the perfect test market. And given the small amount of users, startups are forced to think and plan globally from day one. Last year eight out of ten of our members had already expanded to other markets outside Sweden.

Swedish success stories are also important to the community, they inspire others to try as well. We owe a lot to the success of Spotify, Skype, King. Their success has caused the global startup scene to look at Sweden with more interest. This means investors, media and potential employees from all around the world come a little bit easier. Entrepreneurs that have succeeded also tend to give back to the community which means knowledge of scaling into other markets and experiences are shared.

Editor's note:

The founders of successful Swedish startups highlight the need to go global at the very beginning.

Niklas Zennström, co-founder of Skype:
“We think globally from the outset. We all realized the domestic market is not big enough.”

Jacob de Geer, founder of iZettle:
“Since the days of ABBA, we have really understood the importance of shooting for global presence. The way ABBA did it was to write songs in English. The way we do it is make our services available to anyone, not only Swedes.”

Do Swedish startups have difficulty penetrating the global market? Why or why not? Are there any specific tactics that are known as a key to global success?

We have a great work/life balance that means you work hard when you work but then you relax with an equal passion when you are off. We have a great advantage in our design and engineering culture. The fact that we have welfare system that will catch you if you fail also means that more people dare to try making their dream a reality.

The fact that we have flat organizations, realize that great ideas can come from anyone helps and is definitely part of the reason why we today see a number of success stories. Swedish startups compete with the rest of the world for top candidates and thanks to previous success stories international talent do consider Swedish startups as an alternative. Our community today consists of 57 nationalities. Understanding that diversity in general is important but also that knowledge about other markets come with recruiting people from other countries.

What are some of Sweden's most notable startups, and how do they impact the local community?

One very important part is that the international success of Swedish startups really inspires other entrepreneurs. It changes the attitude, if you see someone not too different from yourself succeed in building companies such as Spotify, Skype, King, Klarna, Truecaller, iZettle, Fishbrain, Instabridge or Natural Cycles. This of course creates a feeling of “if they can then so can I”. In addition to that there is also the more general effect it has.

When media, investors and influencers turn their eye to Swedish startups that enables the next generation of startup successes to go further in terms of funding, attention and network. It also means that international top talents are more encouraged to choose Swedish startups.

A lot of successful entrepreneurs are now using their own capital as angel investors to support the next generation of startups. Many also generously share their time and experience to help the ecosystem move forward.

What is SUP46's role in the Swedish startup ecosystem? How do you support your members, and what have you found to be the biggest factor in their success, from a community management perspective?

Our vision is that all SUP46 members will become global game-changers. In that spirit, our mission is to offer a world-class ecosystem for startups. Our members can expect a smorgasbord of assistance and it’s up to them to choose what they need most at any given point in their development.

Do they want to attend recruiting events? Need PR assistance? Looking to meet investors? We do everything we can to ensure our members get the most out of their membership while they are with us. Our “Community Pulse”, an internal anonymous measuring tool we conduct regularly, from 2016 showed that 9 out of 10 founders felt SUP46 actively contributed to a faster development for their startup. We are currently conducting the survey for 2017.

What we expect from our members is that they contribute to the community in the best way they can. For example, if they have expert knowledge in something like coding or sales we encourage them to host courses for other members within their area of expertise. Something that has been very appreciated.

We are also an open meeting place for the whole startup scene. We welcome 30,000 entrepreneurs, media, investors, politicians and other curious people from all over the world to our premises every year and our event space sees more than 200 tech/startup related events annually. We also run our own Startup Café on the premises, to which anyone is welcome to work from, get to know the Swedish startup scene or just have a Swedish fika.