Growing Helsinki s Startup Ecosystem Dane Stangler June 2017 @danestangler
Our Common Challenge (and Opportunity) Software eating the world Technology penetrating more sectors Fears over automation and unemployment Difficult transition for many regional economies 2
To Manage Economic Transition, More Places Trying to Encourage Startups 3
Yet the Rewards from Startup Creation and Growth are Concentrated 300 Global Distribution of Ecosystem Value 250 200 150 100 50 0 Silicon Valley Beijing New York City London Shanghai Berlin Boston Los Angeles Tel Aviv Bangalore Stockholm Amsterdam Seattle Austin Chicago Paris Singapore Vancouver Salt Lake-Provo Atlanta Denver-Boulder Delhi Toronto Sydney Barcelona Mumbai Jerusalem Global Median Montreal Omaha-Lincoln Sao Paulo Moscow Seoul Lagos Phoenix Frankfurt Melbourne Helsinki Johannesburg Ottawa Lisbon Kuala Lumpur Rio de Janeiro Quebec City St. Louis Houston Santiago Mexico City Albuquerque Cape Town Turin Florianópolis 4
That Concentration Has Not Changed Much 5
What s Needed MORE VIBRANT STARTUP ECOSYSTEMS 6
Startup Genome Empowers Leaders and Builds Local Consensus to Catalyze Action for the Ecosystem Our Mission: Fuel measurable economic growth by spreading the global startup revolution in cities and countries all over the world 7
Data + Knowledge + Credibility Data-Driven & Comprehensive Methodology Largest Knowledge Base Global Recognition and Credibility 55 cities/28 countries 9 factors, 24 sub-factors, 100+ metrics First Startup Ecosystem Lifecycle Model of evolution Built by experienced startup leaders, starting with Steve Blank World s largest primary research from the Voice of Entrepreneurs 10,000+ founders Two largest global startup databases plus data from 100 local organizations Reports quoted in 100+ publications including FT, WSJ, Forbes, The Economist Most popular ecosystem report: 2017 = 200,000 global views in 2 months 8
Our Approach LIFECYCLE AND PERFORMANCE 9
Startup Genome: Evidence-Based Policy Engine Based on Primary Research from the Voice of Entrepreneurs 1) FOCUS on the Right Issues at the Right Time => Maximize Impact 2) CLARITY on Gaps from Scientific Evidence => Build Consensus for Action Lifecycle Evolution Success Factors Economic Strengths 3) STRATEGIZE by Leveraging Local Strengths that Match Attractive Innovation Sectors => Accelerate Growth Strategic Budget Allocations Policy Action 4) ACT on Specific Levers Proven to Solve Gaps => Achieve Economic Impact 10
Ecosystem Lifecycle Model Activation Globalization Expansion Integration ICT sector truly subject to global competition Most economic impact produced by large scale-ups Economic performance increases with ecosystem size Large size cannot be achieved with local resources only 11
Helsinki Has Activated Local Resources and Reached Globalization Phase Activation Globalization Expansion Integration Runner -up for Global Top 20 Helsinki 12
Size Matters: Increasing Returns in Ecosystem Performance 6 5.5 Stockholm Exit Value Growth Index 5 4.5 4 Global Median Jerusalem Paris Amsterdam Berlin London 3.5 Helsinki 3 0 5 10 15 20 25 30 Exit Value ($B) 13
Triggers Explain Non-Linearity in Growth Activation Globalization Expansion Integration Size grows nonlinearly due to impressively large scale-ups $100M Exits $B Exits These Trigger National and Global Resource Attraction Large scale-ups and competition for resources are central to creating economic impact 14
500 To Grow Larger and Faster, Ecosystems Must Move from Organic to Inorganic Resources 400 300 200 National Startup Attraction Global Startup Attraction 100 0 Activation Globalization Expansion Integration 15
Success Factors Model: Model of Ecosystem Assessment based on Global Voice of Entrepreneurs Team RESOURCES Local Ecosystem NETWORKS (Knowledge Flow) PERFORMANCE Exits / Triggers Ecosystem Value Local Context Resource Attraction Startup Experience Talent Founder Funding Organizations Global Connectedness Local Connectedness Global Market Reach Startup Output Economic Impact 16
Global Know-How Fuels the Creation of Startups with Global Potential, Scale-ups and Exits Team RESOURCES Local Ecosystem NETWORKS (Knowledge Flow) PERFORMANCE Global System Resource Attraction Startup Experience Talent Founder Organizations Funding Resource Recycling & Experience $1B Exit = Global Attraction Global Connectedness Global Know-How Local Connectedness Exits (Scale-Ups) Global Market Reach Globally- Leading Startups Startup Output Economic Impact Billion-Dollar Exits & Unicorns Trigger Global Resource Attraction, further fueling Global Relationships and Know-How 17
Policies Affect Ecosystem Resources and Connectedness Resource Attraction Startup Experience Global Connectedness Local Context Talent Founder Funding Organizations Local Connectedness Policy Laws (e.g. immigration and funding to organizations, programs, and institutions can impact all of these factors. Total Budget is key: you cannot move up the ranking without investing more than others. Governance structure is important to be efficient no waste, duplication, lack of coordination. Allocations according to priority issues and strategy increase the impact. 18
Phase Brings Focus Onto Right Issues at Right Time è Drive Action Expansion Integration Integrate ecosystem with local economy, laws and institutions Promote diversity locally Fill Remaining Resource Gaps Expand Resources Activation Build Connected Community Grow the number of startups Generate 100M+ exits Globalization Develop Global Network Inject Global Know-How Generate $B Exits Integrate globally 19
Priorities for Helsinki INCREASE STARTUP OUTPUT; GENERATE TRIGGERS (EXITS) 20
Helsinki Has Divergence Between Density and Output 0.5 5000 0.45 4500 0.4 4000 0.35 3500 0.3 3000 0.25 2500 0.2 2000 0.15 1500 0.1 1000 0.05 500 0 Activation Globalization Expansion Integration 0 Density Output 21
Despite Small Size, Helsinki Has Considerable Room to Grow Larger Startup Ecosystem 22
Increasing Size and Growing Faster Will Require Focus and Action on Key Areas Team RESOURCES Local Ecosystem NETWORKS (Knowledge Flow) PERFORMANCE Exits / Triggers Ecosystem Value Local Context Resource Attraction Startup Experience Talent Founder Funding Organizations Global Connectedness Local Connectedness Global Market Reach Startup Output Economic Impact 23
Early-Stage Funding STRONG INDICATORS, ROOM FOR GROWTH 24
Helsinki Has Strong Funding Base Needs to Expand and Attract More Foreign VC High-level of early-stage funding per startup Growth of early-stage funding is slower than global median 0.8 Seed Funding Rounds Led by Local Investors High percentage of seed rounds led by local investors 0.7 0.6 0.5 0.4 Global Median 0.3 0.2 0.1 0 London Stockholm Jerusalem Berlin Paris Helsinki Amsterdam 25
Helsinki Compares Well to Global Median with Experienced VCs Needs More to Grow Larger and Faster Experienced VC Firm Index London Paris Stockholm Amsterdam Helsinki Jerusalem Berlin Global Median 0 1 2 3 4 5 6 7 8 26
Global Connectedness à Resource Attraction HELSINKI HAS STRONG GLOBAL PLATFORM 27
Helsinki Fairly Close to Core of Global Connectedness 28
High Global Connectedness Has Helped Helsinki Startups Reach Global Markets 0.45 0.4 0.35 % Other Region Customers 0.3 0.25 0.2 0.15 Helsinki 0.1 0.05 0 0 2 4 6 8 10 12 14 16 # Connections to Top Ecosystems 29
Definitely Helped by Events Such as Slush 14 Connections Made Locally with Startup Leaders in Top Ecosystems 12 10 8 6 4 Global Median 2 0 Berlin Amsterdam Stockholm Paris Helsinki London Jerusalem 30
500 But Helsinki s Global Connectedness Not (Yet) Leading to Higher Resource Attraction 400 300 200 National Startup Attraction Global Startup Attraction 100 0 Activation Globalization Expansion Integration 31
Helsinki Needs to Attract More Entrepreneurs London Amsterdam Paris Berlin Stockholm Helsinki Jerusalem Global Median 0 200 400 600 800 1000 1200 Global Entrepreneur Attraction # National Entrepreneur Attraction # 32
And More Startups from Elsewhere Berlin Amsterdam Paris Singapore Jerusalem Helsinki Stockholm Global Median 0 50 100 150 200 250 300 350 400 450 Global Startup Attraction # National Startup Attraction # 33
Related to Low Number of Exits, which Trigger More Resource Attraction, Leading to Greater Startup Experience and Know-How Team RESOURCES Local Ecosystem NETWORKS (Knowledge Flow) PERFORMANCE Global System Resource Attraction Startup Experience Talent Founder Organizations Funding Resource Recycling & Experience $1B Exit = Global Attraction Global Connectedness Global Know-How Local Connectedness Exits (Scale-Ups) Global Market Reach Globally- Leading Startups Startup Output Economic Impact Billion-Dollar Exits & Unicorns Trigger Global Resource Attraction, further fueling Global Relationships and Know-How 34
Helsinki Founders Have Know-How and Ambition, but There are Talent Gaps that Resource Attraction Can Help Fill 0.9 Founders with Prior Hypergrowth Experience and Prior Experience as Startup Employee 0.8 0.7 0.6 Founder Hypergrowth Experience Founder 2 Years Experience 0.5 0.4 Global Median 0.3 0.2 0.1 0 Amsterdam Helsinki London Stockholm Paris Berlin Jerusalem 35
Add to This a Worrying Level of Potential Leakage: Helsinki at Inflection Point on Resource Attraction 0.35 Share of Startups Indicating Intent to Leave Ecosystem 0.3 0.25 0.2 Global Median 0.15 0.1 0.05 0 Jerusalem Amsterdam London Berlin Helsinki Stockholm Paris 36
One Way is for Helsinki to Attract More Immigrant Founders 0.5 Share of Founders that are Immigrants 0.45 0.4 0.35 0.3 0.25 0.2 0.15 0.1 0.05 Global Median 0 Paris Amsterdam Stockholm Helsinki Jerusalem London Berlin 37
To Increase Startup Output, Helsinki Can Also Expand Participation in Startup Ecosystem 0.16 Percentage of Founders that are Women 0.14 Global Median 0.12 0.1 0.08 0.06 0.04 0.02 0 Helsinki Paris Stockholm Berlin Amsterdam Jerusalem London 38
Accelerating the Growth of Helsinki s Startup Ecosystem Will Require Focus and Action Top Priorities: o Double Startup Output o Generate more Triggers Large Exits Increase Early-Stage Funding More Foreign VCs Build on Global Connectedness to Increase Resource Attraction Encourage Recycling of People and Money Expand participation 39
Thank you! Join our mission! JF Gauthier CEO +1-415-722-0345 jf@startupgenome.com Dane Stangler Head of Policy +1 (913) 634-4476 dane@startupgenome.com @danestangler 40