These past 2 weeks saw a number of South Africans visiting Finland on invitation from the Ministry of Foreign Affairs of Finland and some of its key impact partners. We where all there to explore the innovation and startup ecosystem, learn from a variety of sector stakeholders and participate in the annual SLUSH conference. The group was made up mostly of local edTech/eduTech startups hosted by en-novate and the winners from the SLUSH Global Impact Accelerator (GIA) — a local challenge that mLab facilitated earlier this year.
SLUSH, for those who don’t know, is arguably the biggest and best startup and tech innovation conference in Europe. I would personally put it on top of that podium as the best in the world and should probably also note that the word conference detracts from its general awesomeness and energy which is definitely better described as a festival or celebration of innovation and the entrepreneurial spirit than it is a platform to study, dissect and, as in most cases, bore its audience into submission with PowerPoint.
I have had the privilege of working with Finns for a number of years now and I need to admit that I sit firmly in the global fan club of this Nordic nation, so if you continue reading it is with full disclosure of my bias.
Why a fan? Despite it being a country ravaged by a devastating famine and extreme poverty it is today the World’s most equal society (at the positive side of the spectrum). It has one of the most successful education systems in the world and continues to innovate and disrupt the pedagogy to ensure relevancy of skills and also the wellbeing of students. In 2017 they will start a “pilot” for a basic income model — I don’t which is more admirable, the intent or the fact that a nation is willing to test such a disruptive model. And during this visit we got exposed to a very long list of seemingly successful models that is now open to be hacked by citizens because they have an unmatched understanding of how quickly the world is changing and that if as a society they dont keep innovating the disruption will come unexpectedly — perhaps a hard leason learned from Nokia.
This short list of achievements speaks very directly to the potential in South Africa and motivated this trip to foster greater collaboration between our respective startup communities.
So, with my expectations high for another trip to Helsinki, I packed my bags to leave my favourite season in the South to go and spend a week in the freezing North. As the banner at the SLUSH entrance rightly reads “Nobody in their right mind would come to Finland in November” and so pleading insanity I joined 17, 500 other “tech-heads” for another mind blowing SLUSH week.
This year however my mission was a little different. I wasn’t there for just the experience, to support our startups and for the wow of SLUSH but I wanted to try and understand the secret sauce of this ecosystem, which despite a lack of Silicon-Hype and a list of economic reasons to cut back, still continues to grow the number of local startups and R&D outputs. Heading in my money was on “The Money”, firmly believing that as in the USA the secret here was also the availability to both public and private capital. My focus was on learning as much as I could about the funding models and mechanism in place to support SMME development.
By mid week however I jumped on the train after another long day with a colleague from Nepal, feeling perplexed by the fact that while I was somewhat successful in understanding the available funding mechanisms (there is a lot of money available and a lot of innovative programmes to disburse it) I was yet to speak to a startup or innovator who placed it high on their list of interests or as a contributing factor to their current levels of success or their willingness to participate in the ecosystem (why risk it?). As we sat in the train we both noted the “strangeness” of using public transport with no access control or any apparent checks in place to make sure you actually paid for the ride.
It was from this brief discussion about the Finnish honour society that it finally dawned on me that perhaps just below the typical current of capital, skills and location, which are always listed as key requirements for a thriving startup scene, there ran a much more critical stream of Trust. Finland scored 2nd place in 2015 as a Trust Society just behind Denmark and followed by Norway. The Nordics beat out the greater EU giants with the likes of France showing the least amount of trust as a society.
This Trust culture is deeply embedded in the Finnish society and its showing up in every sector that has successfully cultivated world leading innovations. The most admired and innovative education system in the world is based on trust. Trust of teachers and trust of students with no standardized testing, no supervised exams and complete freedom of movement and access to schools. And now they are bidding farewell to school subjects and focusing on interdisciplinary learning. The trust in students to want to achieve their full potential far outweighs any trust in curriculums, systems and processes.
When one finally gets to grips with just how much trust there exists in this country and the Nordic region it becomes so much more apparent that it’s a vital driver for R&D, innovation and ultimately the creation of a startup economy. In 2016 Finland ranked 5th in the Global Innovation Index right on the heels of the USA in 4th place. A remarkable achievement, considering its comparable size in just about everything from population, number of universities and R&D investments.
So here is my “aha” Trust Culture to Innovation Culture hypothesis:
In order to truly drive innovation or invention to a level where it creates real economic or undeniable social value and change, there needs to be an abundance of either Capital (like Silicon Valley) or Trust (like Finland)
In the first case there is sufficient startup and R&D capital in the market that allows for greater amounts of and maintained investment into a large enough pool of innovations. It is accepted that most of these will fail and only few will survive with the successful ones becoming game changing and extremely profitable. Those destined to fail are typically also sustained longer than in our markets, providing jobs for skilled workers who can easily migrate to the next startup when things go wrong. It’s also a place where you can buy a sufficient level of trust through the legal system. This type of ecosystem is a highly unlikely starting point for Africa and serves as probably another argument as to why we should stop striving to be the next Silicon-something.
On the opposite side of the spectrum it seems sits a model built on trust. A Trust Culture provides a very safe space for experimentation, innovation and failure. If it is an idea you believe in then there exists very little reason for society to doubt in your motivation and intent for pursuing it, and should you fail there is trust that the learning from it brings value in future endeavors you or others take on. At the very least there is trust that it creates value for the broader society in knowing what not to do. In Finland failure might disappoint, but it doesn’t come without some level of value. It also provides a much more agile environment. There is sufficient trust in the team at all levels, trust in new ideas entering the development stages and trust in early feedback. The innovation process is a lot more fluid because the trust wasn’t bought through rigid legal agreements and milestones. A culture like this is equally successful in unlocking capital and one might argue that it this is achieved with a little bit more responsibility and humility. As a country we have a long way to go in achieving this basic foundation of trust, especially considering the vast economic and social gap between capital and the greater talent pool, but it does seem like a more attainable goal on which to build a truly competitive and impactful startup ecosystem.
Considering the above I considereed some basic steps, for myself, to germinate a trust culture and here are some of my thoughts which might be applicable to startups in general:
1. Trust in your own abilities. Admit that you don’t know everything and trust that above all else you have the ability to learn quickly and IMPLEMENT IT. Be open about this with any stakeholders or partners. If you don’t have this, you probably have no business founding a startup.
2. Trust your team. This starts with hiring the right people but it doesn’t end there. Trust is a daily commitment you have to make.
3. Consider Agile. Its not only a great way to manage and develop projects but it also fosters the creation of trust and provides you with an easy tool to achieve #2
4. Trust the ecosystem. If you are going to insist on NDA’s and piles of contracts before starting a relationship you simply don’t know your market well enough. If you are meeting someone to discuss your idea you should have done some research to understand their available resources and most importantly any motivation to copy you. Also you don’t have sufficient trust in yourself (#1) and your team (#2) to outperform any copy cats.
5. Trust the process of validation (some may say Failure). If you are succeeding with everything you haven’t actually taken enough risk or pushed the boundaries. Negative validation is part of the innovation process (a key principle of the Demola.net process)
6. Trust your product to work…at least work enough times to outweigh the times it doesn’t, and then trust your team to learn from it and fix it quickly enough. The advice here is not to sit around waiting until its perfect but to test before you launch. Make sure you can use it and like using it.
To end this off I have to give a huge shoutout to two South African startups who made it into the top 10 and pitched in front of a massive crowed at the Impact Stage. See them below.
Also a big thank you to the Ministry of Foreign Afairs of Finland, infoDev and the Slush organisers and volunteers for hosting us and making this all possible. Kiitos!