An Open Letter to Startup Accelerators in Finland

7 improvements that can help accelerators provide a better service

During the past 5 years, Finland became one of the best places for startups, due to an incredible amount of work from the government, VCs, angels and various accelerators.

I got to work with 5 different startup incubators/accelerators in Helsinki area and while in general my experience has been largely positive, learning more and more about running a business in Finland, I have started to notice few areas for the improvement which are addressed in this “letter”.

1. Hire entrepreneurs to help entrepreneurs

The majority of advisors we got to work with a had largely corporate background — they were consultants, program managers or bankers, but neither of them had a real hands-on experience of starting they own business. And needless to say, ability to get funding as a consultant for a large company or prepare a fancy powerpoint presentation about strategy is a far cry from a small startup needs.

Just after Microsoft-Nokia debacle, there has been over 300 new companies created. Most of them, even the most notable ones like @Jolla, have failed. But each of those failures is also a tremendous learning experience that must be shared. After all, even @Supercell and @Rovio got where they are right now after almost a decade of making games that have ultimately failed.

To sum up, search for people who have made a good product, but a bad business. They will be the best guys to help younger startups.

“Only those who dare to fail greatly can ever achieve greatly.”
- Robert F. Kennedy

2. Stop focusing on business plan

This problem is a derivative from point 1 — a typical startup advisor has consultant’s mindset. At some point we have spent almost a month with our advisor ironing out multi pages business plan, calculating addressable market and making 5 years revenue projections. A year later we have closed the company. None of the projections worked out for a very simple reason — we had no control real control over them, nor prepared a plan how to influence them. Expecting your userbase to double in month based on some statistical data, is not the same as specifying what exactly you will do to make it double.

The only thing any startup needs is to find a service for which people will pay and make sure they can replicate it over and over again. Only then you need a multi-page business plan, otherwise, you are just wasting your time.

3. Stop using the US as a reference

Forget about multi-million valuations, growth hacking, pitching and please stop reading TechCrunch. EU is not a homogeneous addressable market of 319 million people. Each country has it is on legislative and regulatory “issues”, let alone cultural differences and languages. Finland alone has its own ecosystem, mentality, and user behavior traits.

Focus on the home market. Make sure you have helped to use the best public funding instruments in our disposal. In Finland alone we have Tekes, Sitra, Finpro and Team Finland, let alone constant EU-wide projects like Horizon 2020. This is where previous consultancy experience truly can shine.

4. Share document templates

Each startup needs employment contracts, NDAs, shareholder agreement, vesting agreements, board and shareholder meeting minutes templates.

Getting a coherent and well-prepared set of any document needed to run a company in Finland was probably the most valuable thing we got. Sadly, we got it only from 1 out of 5 incubators we have been to. Definitely, something to improve.

The best initiative so far, unfortunately, limited only to SHA, is

5. Help building a strong advisory board

Accelerator advisors can be mistaken for the advisory board, but having people who put their sweat equity is not the same as few gentlemen “assigned” to help a startup. As a rule of thumb, any startup needs advice with finance, marketing, technology and legal.

The best advisory board are built exclusively through personal networks, and most first-time entrepreneurs need serious help here. If you already have a network — let others to use it as well.

6. Focus on serving startups first

The majority of incubators in EU (and Finland in particular) are funded with public money, yet some are asking an equity stake from each admitted startup. I fully agree that a person without ownership is fundamentally misaligned with the company goals, but perhaps the procedure should be reversed. Startup owners need to decide who from the mentors shall be rewarded personal (and perhaps keep acting as an advisor in future), instead of giving away a chunk of their company to the entier organization.

7. Work with TE-office

With a current unemployment of over 10% (and youth rate over 20%) TE office is really trying hard (sadly they don’t think much about startup needs, but that is a separate story).

There are multiple rebates program like palkatuki and sanssi (company gets up to 50% salary back for hiring unemployed person), requalification and consultancy programs, free job board and fairs, European mobility and many others.

None of them was ever emphasized for us as an exellect instrument to save on labor costs, not to mention helping people find a new place.

In conclusion, I would like to say “thank you” to every single advisor we got to work with. Without you, we @Eliademy would never get this far.

I certainly hope that some of the things I have encountered have already been addressed during the boom of accelerators in 2015 (this post is based on my personal experience between 2012 and 2014). If not, I’m happy to extend this post with new idea how to make Finland the best place to start a business.

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