Arctic Startup

Several Finnish companies have been included as finalists for the 2008 Europe 100 list of the of most promising ventures Red Herring is once again publishing. The companies are Aito Technologies, Floobs, Muxlim, nCore, Severa, Whatamap.com, Widisys, and Valimo Wireless. The winners will be declared at Red Herring Europe 2008 event in Malta on April 14-16th.

While the nomination gives good visibility to the companies, it’s worth a note, though, before going boasting around that the reputation Red Herring has is not that good everywhere. There’s a whole lot of suspected monkey business going on related to the company. According to rumors (see ValleyWag’s posts for example), Red Herring’s CEO and Chairman, Alex Vieux, doesn’t pay his bills (nor employees’ salaries). In addition, he’s got the U.S. tax officials of IRS on his back, suspected of having $2 million in unpaid payroll taxes according to ex-employees. Mr. Vieux has also been said to to have fled French and Swiss police also interested to investigate possible unpaid taxes. A good sign is neither that Red Herring has lost quite a many board members over the last couple of years.

Although not all the rumors may be true, it nevertheless seems the company is in trouble and it’s unsure if it’s able to turn its course. As a takeaway it’s good to enjoy the publicity the nomination brings, but at the same time it’s worthwhile to assess what kind of association to have with Red Herring in particular and keep one’s ears open.

I and Miikka had a chat yesterday with Tatu Laurila, CEO of Greater Helsinki Promotions about a venture they are organising for Finnish startups and prospects to Israel. Greater Helsinki Promotions is co-organising the event with Technopolis ventures.

Ten of the finest Finnish companies eligible for this venture will be sent to Israel to the IVA Hi-Tech Conference 2008. The event is held in Tel Aviv 19.-20.5.2008. The Israeli Venture Capital Association (IVA) has offered the Finnish organizers an opportunity to bring 5-10 promising start-ups plus an accompanying delegation to Tel Aviv for IVA’s annual conference, which attracts about 1,500 global players from the high tech industry, including VC and Corporate investors. Large number of global VC’s will attend the conference. The estimated cost for the whole program is a maximum of 5000 € at the maximum, a more exact budget will be available in the next couple weeks.

Deadline for enrollment is 2.4.2008. If you’re interested, contact Will Cardwell of Technopolis Ventures for more information on how to apply.

For those who are unaware with the startup and entrepreneurship environment in Israel, it is a lot more effective than it is in Finland. The countries themselves are similar in size and population. With a focus on entrepreneurship and a 15-year strong track record, Israel has managed to enlist over 100 companies to Nasdaq and there seems to be more in the pipeline. There’s definitely a lot there to learn. Arctic Startup will try to cover the process, preparaion up to the event and the event itself as thoroughly as possible. Stay tuned!

Eniram received a major investment from Conor Venture Partners earlier this month. The exact amount was not disclosed, but it’s believed to be around €1 million (major by Finnish standards). The purpose of the investment is to strengthen Eniram’s marketing and sales operations in order to expand globally.

Eniram was founded in 2005 as a spin-off from US-based engineering consultant Edec, which remains a partner to Eniram. Eniram focuses on the maritime industry, providing system integration solutions allowing its customers to save costs and lower emissions through lower fuel consumption. The team reportedly has a great deal of knowledge of the industry and software development. The rumor also has it that Pekka Roine from Conor joined Eniram’s board, bringing the company extensive experience of running technology and software business.

Press release.

Fiksuhuuto.fi is an online bidding company founded in early 2008 by Jussi Mäntylä and Tuomo Siurua. The idea behind the concept is simple yet unique. There are open bids on the website put up by the company. You purchase a right to bid for those products (priced between 1,90 and 0,84 euros). Every bid you make increases the price by one cent. Also, when you place your bid for the product the countdown to close the bid starts from the beginning. The coundowns are usually between one and two minutes.

Jussi and Tommi have filed a patent application for the idea. Currently they employ 12 people and ship around 100 products per day. If you calculate 30 bids per product (which is probably far too little), they would be getting somewhere around 3000 euros a day (on an average bid price of 1 euro) just for the bids.

Combine marketing people with a possibility to launch a product online and you get a service where you have to pay to see advertising - News to Screen. In short, News to Screen is a seperate program you have purchase for 29 euros a year to get the news you can get online for free.

In the program you have your normal news headlines, the area where you read the news and a video banner where you will be targeted with advertisements. They company has also had a very hungry start in terms of PR. During the doping scandal of the Finnish Biathlon Association, they were the only company that actually started a sponsorship deal with the skiers left in the association.

There’s enough competition out there in the market with regards to free RSS newsreaders that you really don’t need to build barriers of adoption to your product, like putting a price on it. The company has 13 employees at the moment, of whom 4 to 5 are technically oriented. I wish them all the best, but somehow I just don’t see this product taking off.

I did a video interview of Kai Lemmetty and Joonas Pekkanen from Floobs some time in February. I never had time to edit and go through the video, but I finally managed to do so in the Easter holidays. During the editing of the video, I noticed that the add-on microphone was slightly faulty and it only recorded the left channel - therefore the sound quality is quite bad, apologies for that. Nevertheless, I decided its better to release the video late than never - so here it is:

I met Christoffer Landtman the CEO of CompanyCube in our Open Coffee with Arctic Startup event. CompanyCube has a very interesting position in terms of their business. They have managed to penetrate the somewhat unsexy commodities market of traders with their product. More specifically, they offer steel traders a viable solution to handle their processes.

The service is provided over the internet, accessible from anywhere - even the mobile phone they claim. The service includes trading management, customer relations management and business intelligence. Trading activities are managed as seperate projects and each project therefore includes certain routines such as stakeholder management, scheduling and so on. CRM is the regular integration of customer data to match more closely to the trading activities. Business intelligence has been built in to give a quick dashboard type of display to running your business and help make decisions faster.

CompanyCube is positioning themselves in huge market, measured to be 318 billion USD in 2005 worldwide. Due to large acquisitions and mergers the IT solutions are a mess and largely fragmented, according Christoffer Landtman. They have started off well in Finland as SteelTeam, the largest trading house of steel has began to use their product to streamline their business.

Eero Aarnio, one of the most famous Finnish designers, has taken his work online to Playforia, the 3D virtual world created by Apaja. He created the timeless Ball Chair in 1963, which has been hugely popular around the world. Apaja, the company behind the casual gaming site, has built Playforia as part of their service portfolio to gather audience from the huge population living in online worlds. According to Asmo Halinen, one of the founders of the company, over 30% of the users in Playforia and Aapeli are over 30 year olds.

Apaja is venturing into the same direction as Sulake, who has done a lot of co-operation with 3rd party content suppliers in their Habbo Hotels. It’s definitely a feasible way of bringing in valuable content and creating that link between the virtual and real world that users normally crave for in some sense.

Disclosure: the author is a former employee of Apaja.

Laurea is arranging a series of seminars for entrepreneurs in Finnish. The first was actually held today, but the next one will be on 25th of March in Leppävaara. The speakers in the series of seminars are Joonas Turkama of CoreFinland and Mikko Silventola of Calcus Kustannus, Mohamed El Fatatry of Muxlim.com, Esko Alanko of Micromedia, Taneli Tikka of Wisdom Like Silence, Heidi Ekholm-Talas of BSG Marketing and finally but not least Eero Lehti from the The Federation of Finnish Enterprises.

Interesting line-up with interesting people! You can read more about the series of talks from here. As a short reminder, we (Arctic Startup and Open Coffee) will be hosting another event in April on entrepreneurship. The schedule and theme will be announced later.

I did a small e-mail interview with Helene Auramo, HSE student, MA student in TAIK and CEO of Zipipop. Zipipop was founded July 23rd 2007, but Helene and Richard von Kaufmann had started planning the company some 9 months earlier. The young company has 5 Facebook applications as their products.

Helene, you’re the CEO of Zipipop – what does Zipipop do?

We make social media applications that help make life easier, for example getting your friends together for drink. Our current focus is on Facebook, however, we are about to start developing for other social networks too. And we’re always thinking about mobile possibilities.

At the moment most of our income comes from making custom applications for various clients. However, these are mostly based on our own Zipipop platforms. One example is the Laika application “What kind of dog are you?” inside Facebook. Laika Design is a cool Finnish company that produces bags and accessories with a dog theme.

Can you tell us how you went about starting the Zipipop – did you plan to do Facebook applications from day one or was that a result of some other decision?

I have a background in Helsinki School of Economics, but also in University of Art and Design Helsinki, in media lab. I met other two Zipipop partners; Richard von Kaufmann and Tuomas Laitinen in media lab. And the idea of Zipipop came in one UIAH’s course together with Richard.

One Friday last summer we had our normal afternoon tea break, when we started to talk about Facebook and its applications. We had an idea that we should test the platform and create an application there. And one week later, we had the first version of Friends Pad online. We also thought that the Facebook platform might be suitable for spreading our other web-based software.

You started the company while studying – how well does studying and running a company mix together?

I just had one week holiday from Zipi office because I had to study. But otherwise I haven’t been that much away from the office. However, I hope to graduate on June 2008 from HSE. At the moment I’m working days and trying to study on evenings and weekends. My thesis is also related to Zipipop.

Being in school at the same time has been good in the sense that we have received a lot of help from other students and teachers. And some courses have really given me good ideas related to running a business.

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Thanks to Helene for the interview! Although there is a lot of capability to grow the business in a difficult industry, I’m glad to see people taking initiative already earlier on in their studies.