The CEO of Blok shares insight about growing in the Nordics: Q&A with Rudi Skogman
The first (of many to come) founder story is by Rudi Skogman, the CEO of Blok, the Finnish startup that automates the real estate market by utilising automation and artificial intelligence. That means speeding up the house sale process enormously. The company has had a great year behind, both expanding the team as well as closed new rounds. Now, it is Rudi’s time to share his thoughts on both strengths in the Nordic startup ecosystem, but as well challenges that could and should be fixed.
What’s cooking these days and what kind of plans do you have?
So, as many of you might have noticed, we just closed a new investment round worth about €1.65M. We had Lifeline Ventures lead the deal, the Finnish VC fund probably most well known for being the first investors in Supercell. Also, one of the biggest media houses in the Nordics, Bonnier, joined in on this round. This will help us immensely as we grow in Finland and across the Nordics in the future. We don’t have any set dates for launching outside Finland just yet, but we’re looking for ways to do it already.
What is it like to build a company in the Nordics? Describe some hidden germs that aren’t that obvious for people who do not live here, but is a huge advantage for an Nordic entrepreneur.
Hidden germs indeed, I have a fever right now as I’m answering these questions! No but seriously, I think the Nordics is one of the best places to build a company. Labour, cost of living, standard of living etc. are actually a lot better here than in Silicon Valley or London. I used to say that I’d start a startup in London but they went and shot themselves in the foot with Brexit, so here we are. However, I don’t know if Blok would have been started there anyway since the Nordics are actually much better for us. Something that many don’t realize and don’t really notice, is that we’re actually all very technologically advanced. Many government offices work electronically, bank account are easy to open, employee health care etc. can all be taken care of online. This is something that is still rare. On top of that, all of the Nordic governments are trying to find ways of making even more things digital. This opens up great opportunities for fast acting startups.
What do you see as things that are slowing down your growth in the region?
One of the big issues we have up here, is that the home market is small. It’s honestly tiny compared to the other startup-hubs like SV and London. This means that companies have to push out of their home countries a lot earlier than they’d otherwise have to. This I fear, often leads to failure, as the company hasn’t had the opportunity to properly prepare for international expansion. On the other hand, this also means that they really can’t stay stuck in their original market for too long, which means that if they do succeed, they’ll often become international success stories much faster than their English-speaking counterparts.
What would you say the Nordic has to learn from leading startup hubs such as SF, London, Berlin? And the other way around — what do you think these hubs has to learn from the Nordics?
There’s always a lot to learn from how other people do things but I don’t think we should be too occupied by what’s happening in these other places. I think we’ve already managed to solve the biggest issue we had, which was access to money. We now have a huge amount of very early stage investors, a good amount of A-round investors and even chances for B-rounds locally. The only spot where we might be lacking is the 500k-1.5M€ ticket-size. Many larger VC:s have grown past this quickly and smaller VC:s haven’t reached this level yet.
I think these hubs should certainly start looking more into the human aspect of life. It’s not all about working your ass off, you need to be able to sustain a normal human life on the side of it. I think this is something in which we are outrageously good at here in the Nordics and something we should definitely hold onto. I think there’s an old saying that’s something like “A startup is not a sprint, it’s a marathon”, which describes it quite well. No point in burning out your brilliant coders and copywriters.
Name three challenges that should be fixed in the Nordic startup ecosystem
Access to people — we are reaching a point in the Nordics where we’re running out of skilled people, especially in dev roles. It’s harder and harder for companies to grow or even start, when you don’t have enough people to pick from. This could lead to companies hiring people they otherwise wouldn’t or risking slower growth. On the other hand, I also think there’s a shortage of really experienced and brilliant people, people that have gone through it all in a startup earlier and know what they should do. This is something that’s easier to find in London & SV.
Access to mid-level funding – As I named earlier, I feel that there’s a gap in funding at the 500k€-1.5M€ range. This is where many startups end after their seed round but before they’re ready for an A-round. There are a few very good investors in this space but not enough. I feel like later stage capital will (and should even) come from outside the Nordics. As you need to grow to the rest of Europe or to the US, it makes sense to take on a late stage investor from the UK or Germany or France or the US.
Ease of doing business — I said earlier that it’s easy to get things up and running in Finland (and the rest of the Nordics) but it’s still tremendously laborious at some points. It’s also still a too big of a risk to hire someone, as getting rid of them isn’t as easy as elsewhere.
The job market and government offices (like the tax authorities) aren’t flexible enough to support high growth startups and their sometimes very special needs.
If you could wave a magic wand and instantly have any imaginable solution to a problem you’re facing as an entrepreneur, what problem would you solve? 🧙
I’d suddenly have all the hires done and at the office, working efficiently as hell from day one.
This is the first in the series of interesting founder stories from the Nordics. We want highlighting the different viewpoints on what is cooking in the startup ecosystem and from the founders experiences, get hands-on tips on how we can further develop the Nordic startup ecosystem.
Rising North is three-year project funded by the Nordic Council of Ministers and operated by the Finnish Startup Foundation. Applications sent to the fund are evaluated once a quarter. The next deadline is on March 1st. Projects organized jointly by at least three different Nordic organizations can apply for a grant of up to 50 000€. Previous projects and more information can be found at risingnorth.org.
