Sunday, March 22, 2015

Wrong focus in the startup buzz

Following the startup buzz - the news, the mentorship programs, the blogs - one easily gets the impression that the most important things for a startup are pitching, finding capital and creating an exit strategy. Well, in my experience this is wrong and perhaps one of the reason for over-emphasizing these topics is the hunt for news.
 The event of getting funded is usually presented as a huge success story in the press. It is rarely mentioned that the investors do want their money (x20) back, the sooner the better and it is the startup who has to deliver that. Getting funded is rarely presented as giving 3 drops of blood to the VC, but in a way it is so.
 Similarly controversial is the buzz around Exits. The Exits do make good news as someone makes millions with them. At the same time the news do not mention that for a successful exit the company needs to maximise the income from customers (short termp profits prevale), minimize personell costs (keep only the employees needed for day to day operations) and sell the whole thing to a corporation who then merges the employees and business to its big machinery.

 While pitching, funding and exits get a lot of attention in the startup buzz then one rarely sees any coverage about people management. It seems that management, coaching, training and developing the team are something only the big companies need and that are irrelevant in startups. And this, of course, is absolutely wrong. I have managed a number of different teams and I have never seen a person who just works. Everyone wants to know where is the company going, what is his/her personal development plan and wants to have his/her say in how to organize the work in the best way. These, among with topics like handling relationships, communication in the team, solving problems and finding the best way eveyone can contribute, are areas where startups and all other businesses do need mentoring and focus also.

Monday, March 16, 2015

Suomi nousuun!

(This post is meant as a motivational to Finnish politicians.)

I have visited Finland for a couple of times in the last weeks and talked to finns living both in Finland and Estonia. For some reason there is a note of depression whenever the topic of Finnish economy comes up. Government deciding nothing for 5 years and Russian sanctions tend to come up. It is far from the optimistic bostadsbubbla that one sees in Sweden. The most amazing was a story of a Finnish IT startup with only finnish employees and customers that had just moved to ....Tallinn, because of the energy they feel in Tallinn.

So what might be the reason for this? One might guess that taxes are one, but actually it is not only that. It is the bureaucracy, non-business related costs, insurances and all type of licenses and rules. Let me shock the finnish business community with the following prices and facts about Estonia:
- Accounting services cost 50-70 eur/month for a small company and that includes making the annual report.
- Bank costs and services are the same as for ordinary people. That means 2,5 eur/month for a bankcard I think.
- There are not very many mandatory insurances...actually none for most of the businesses
- There is no corporate tax on your revenues if you don't take them out as dividends
- With e-residency you can do all the transactions online from wherever in the world.
- Most of the paperwork can be done online. In fact I have not seen the accountant of my little company for 5 years now and I have never visited the tax or other authorities physically. You can sign all the documents and reports digitally.

So here is what to do in the IT business! Incorporate in Estonia. Buy resources from all over the world, e.g. India, Belarus, Poland. Put it all together to a service in Estonia and sell it to Finland, Sweden, Denmark and Norway. (I can give a few tips on how to do it) ...or maybe the Finnish politicians will cut down the bureaucracy? ...and the Finnish insurance and banking sector will cut down their prices for businesses? I do hope so, because I love Finland.