Archive for November 2008

Orxter Goes After Amateur Classical Musicians

by Ville Vesterinen, November 28, 2008 — Leave a Comment

Orxter, a Finnish online service for students and teachers of classical music, is well on its way to launch in 7th January 2009. The same day the schools will open after Christmas holiday. This is not a coincidence as Orxer is looking to schools as their main go-to-market channel and get the students to user their service.

The service is especially helpful for music students and amateur musicians as it lets one buy real symphony orchester soundtrack, which have the melody removed. One can also get all the notes for free via the service.

The business model is based freemium model where you get the notes free, but you have to pay for the soundtrack, which is 5 euro per song. To make the soundtrack more appealing the founders realized it sounds way better when recorded just like in the movie soundtracks, where the sound is recorded right next to the instruments. You get a lot more bang and wow to the tune this way.


Etsi muita samanlaisia videoita Orxteri

The video clip is from Orxter’s Beginner – series tutorial videos.

The founders have wisely used many existing services by tweaking them to fit their service. They use Ning for the social network platform, where each user can build her own profile around her musical taste and the music  she likes to play. Similarly they also use ustream.tv and kyte.tv to let the users watch and learn from video.



The two founders have a very strong background in music. Jari Ravaska is a professional studio producer and Pekka Suominen is a jazz musician and long time music producer with a technical background.

The founders decided to build the service after being frustrated with the grayness of current methods on how young people are being taught music. The idea behind the service is that music can, and should, be fun. So in effect, the founders want to remove the stiff image that classical music has, so that also the young would find the classical music appealing again. The big vision is to build a global digital music academia in the Internet in couple of years time, which could have only a fixed fee for all the services.

What’s Your Need Of Financing?

by Antti Vilpponen, November 28, 2008 — 2 Comments

i2m – Ideas to market, a UK based research firm, has released some very interesting figures in terms of startup financing, according to Sun Startup Essential Blogs. They have researched some 800 entrepreneurs and small business owners over a variety of areas.

The key findings of the financial research has shown that about 40% of startups seek under 10,000 GBP to become profitable while 30% seek between 10,000 and 100,000 GBP to become profitable. Only about 15% of startups seek more than 100,000 GBP to become profitable.

In the findings, Permjot Valia, a business angel and member of the British Business Angel Association describes that the engine of Britain’s entrepreneurial industry is friends and family. If you take this thinking to the Nordics, I’d say the results would be tilted towards the 100k€ mark.

This of course raises questions of other sorts – are we really able to bootstrap up here? Do we take the financial status for granted and regard that something as of a given right even in a startup? Provocative questions to ask, but what are your thoughts – which category would you reckon would be the largest in your home country?

Photo by jenn_jenn.

An Outsider’s Take On Finnish Startups

by Guest Blogger, November 27, 2008 — 6 Comments

We invited Peter Robinett of Bubble Foundry to come and attend Slush on behalf of TheNextWeb blog, an Amsterdam based weblog that reports on everything that influences the future of the Web, in any way. Peter himself is a developer now living in Amsterdam and very active in the local startup scene. Peter for example organizes Lunch 2.0 and Mobile Dev Camp in Amsterdam. Here’s Peter’s take on the Finnish startup scene.

I had a great time attending Slush on Monday and Ville asked me to share my thoughts of the Helsinki startup scene. While more directed at ArcticStartup’s Finnish readers, I hope these comments proven interesting to all ArcticStartup readers. My experience with startups is mainly through working with Dutch ones and organizing various events in the Netherlands, though having grown up in Silicon Valley I hope I have a somewhat accurate sense of how things work there too.

Continue reading »

Traditional Press Uninterested, President Apologizes

by Antti Vilpponen, November 26, 2008 — 22 Comments

Now what kind of a title for a post is that you may ask. It’s a title that is trying to constructively criticise the traditional press about its methods. We’re talking about Slush Helsinki of course.

The sad truth is that the traditional press was uninterested in covering anything from Slush, be it a short article online or a in a more material format. A quick query with Ampparit, a Finnish news aggregator site, results in 0 results about Slush. The irony of this is that the President of Finland, Tarja Halonen, has written an apology e-mail to Helene Auramo, one of the organisers, apologising that she was unable to attend (Helene wrote about this in Jaiku). The press did not bother to reply to any queries about coverage.

This is extremely sad, when Risto Siilasmaa, one of the most successful Finnish entrepreneurs said in his keynote about growth entrepreneurship the responsibility everyone has in times of crisis. He also nodded towards angel investors, as they need to believe more than anybody in these companies to invest in them – when it makes no economical sense whatsoever. Risto also talked about the responsibility of the media – these companies need visibility – ahem ahem, are we the only ones supporting this cause?

Slush Helsinki was an extremely successful event in many different ways. We managed to get the elite of the Finnish growth entrepreneurial scene under one roof for the first time in Finland and in a way that close to 400 people could listen and learn from these experts. This in itself is something that should interest many people, what do these experts have to say about pushing yourself beyond belief in a venture that only you believe in with endless passion – looking to make it big from the Arctic.

However, being able to organise such an event that created so many happy faces, so many positive thoughts about the future of the growth entrepreneurship and so many new deals during a time of huge, unimaginable financial crisis. I believe these sort of events are extremely important as they lay the foundation of hope for something that is crucial to the economy in terms of not only growth, but competition in the international markets when we, Finland especially, cannot count on the support of the more traditional industries such as forestry or machinery.

Then again, Slush Helsinki was not created with support of external financing nor official support from a member of government. It was created out of passion and belief that growth entrepreneurship does and will happen out of the Arctics. Maybe in a few years we can turn to the traditional press and tell them – we told you so.

Apologies for a long rant without any bigger news value (pun intended), but I believe this is an important issue that should be addressed and not only in Finland. We’ll be releasing lots of video material in the coming days to spread the knowledge from the event.

XIHA Raises Chinese VC Funding

by Miikka Kukkosuo, November 26, 2008 — 3 Comments

XIHA is a Finnish startup developing XIHA Life, a multilingual social media platform and an online community targeted at people living outside their home country, and the multilingual people around the world. XIHA invites users of any language, but adjusts the user experience to each user so that they only see automatically the content they understand. Despite the current economic climate, XIHA has raised a significant amount of risk capital from a Chinese VC.

Jani comments it’s hard to find risk capital in Finland to support global growth. According to Jani the Finnish VC’s thought the risk was too big. Out of the international VC’s Jani thought Chinese were the best, as they have both money and vision.

The amount of investment was not disclosed. However, the amount is rather significant, as the founder and CTO Jani Penttinen says with it the company will open offices in the US, Switzerland, and China, and will hire ten more people, developers and business roles, to achieve 24h global operations. Another ten will be hired later depending on the economical climate. There is also more money coming if certain growth targets will be hit. XIHA has strong Chinese roots due to Jani working in the country, and Jani’s spouse Sun Xiaowen being Chinese. “Xiha” means ‘fun’ or ‘happy’ in Mandarin Chinese, and also ‘Hip-Hop’ in Cantonese.

As of now, XIHA is still losing money, but the goal is to get to profitability by the end of the year. So far the main income source has been downloadable games, but XIHA is planning to expand to other digital products as well. Below is a quick interview with Jani Penttinen from Slush Helsinki.

Live From TechCrunch Brunch

by Miikka Kukkosuo, November 25, 2008 — Leave a Comment

Reporting live from TechCrunch Brunch in Helsinki the morning following Slush. The theme for the morning’s panel discussions are the implications of regionality and unique features in the Nordic startup scene.

The event was kicked off by Mike Butcher from TechCrunch UK and Ville Vesterinen from ArcticStartup, chatting a bit about Slush, its background and the Nordic startup environment in general.

The panelists (from left to right in the picture below):
Kai Lemmetty, Founder of Floobs
Janne Waltonen, Marketing director Fruugo
Mark Sorsa-Leslie, Managing director of Hammerkit
Jussi Laakkonen, CEO and president Everyplay.com
Leo Koivulehto, Co-founder and chairman, TripSay

Mike set the scene asking how the panelists see the startup scene in the Nordics, whether the environment is going to stay a tough place to do a startup due to relatively high living costs, difficulties with angel and VC funding etc. A few highlights below.

Mark stated he moved from the UK three years ago, and has been impressed with enthusiasm people have, the great engineering skills, and the passion to get things done in a practical manner. Janne continued the people in Nordic countries are quite modest, which is somewhat hindering international expansion
.

Janne mentioned the Nordic market’s been traditionally about local startups thinking of local markets (Swedes being maybe somewhat different), which should end. As Janne put it, we really have all it takes if we have the will to take over.

Peter Vesterbacka commented the downturn is a perfect time to start a company as you have less competition and could be able to take over a lot of the potential customers in a swift. Furthermore, it’s perfect to start in the Nordics, as “if you can make it in the slush you can make it anywhere”. The current global economic environment it’s actually not even that much different from the “normal” challenges up here.

Mike commented in London the startup world is focusing nowadays on revenues much earlier in the game. According to Janne startups should start marketing as soon as possible, and not really wait until their product is “ready”. Traditionally the startups have relied perhaps too much on virality (beta invites etc.). Janne compared his experience between Fruugo and two Swedish startups he’s been in, and noted Fruugo has really concentrated on not showing anything in public before they are sure their technical back-end is top notch, whereas the Swedish ones were really open since the beginning without even much knowledge about the technical side.

Stephen Lee from Muxlim added, as an American who’s lived in Finland for 10 years, that the governmental systems supporting startups are built around the concept of startups having to prove themselves in Finland first, before getting further money to go abroad. According to Stephen this model doesn’t really work anymore, and the organizations (and startups) should turn their focus on going global from the beginning.

Jussi answered arguing the Finnish game industry has gone global since the very beginning. Nowadays the industry is healthy and buzzing with 50+ companies with over 90% export ratio, so it’s been proved already we can make it from here. Jussi continued the process for pitching a game concept to a games publisher is really similar to pitching a company to VCs, so there are people who have been pitching successfully and know their stuff.

The second panel focused around the topics of finding funding and how to cope in the downturn market.


The panelists (from left to right):
Helene Auramo, CEO and partner of Zipipop
Heikki Mäkijärvi, Venture parter of Accel Partners
Mohamed El-Fatatry, Founder and CEO of Muxlim
Joakim Achrén, founder of IronStar Helsinki
Kristoffer Lawson from Scred

The panel kicked off going through the current status of the startups – Scred and Zipipop are bootstrapping and looking for funding. Mohamed told Muxlim got very well seed money from Finnish angels, which are quite active and willing to help, but for big rounds the money is difficult to get and momentum can be lost. Muxlim run through 500 international VCs in 6 months, and finally landed with one from Sweden.

Regarding the economy, Heikki from Accel Partners encouraged startups to look critically their business in the current economic situation – if the customers are not buying, it may be worthwhile to stop and rethink the business plan, rather than waiting for a sale or better times. They’ve had very good experiences of startups finding a great business model by refocusing this way.

Heikki also commented they are being more careful about the investments currently. He argued in the early stage companies the team is the most important thing, so that the investors can trust the team knowing what they’re doing. Heikki also went on explaining one notable difference with Finnish startups compared to Silicon Valley is in the executive team. The ideas are typically good, but the executive teams are much more juvenile than in the Valley, whereas the board is typically very experienced. So Heikki would rather see people like the board members doing the execution, mentioning he’d like to see people learning business in big global firms, and then establishing startups in their 40s. He explained while you can build a good startup regardless of your age, in the end it will take great skill in execution to take a startup from 5 Million to 10M, and futher to 50M in revenues.

Slush Live @ ArcticStartup

by Antti Vilpponen, November 24, 2008 — Leave a Comment

You can follow Slush live at ArcticStartup via Floobs’ live streams. Remember, do give us insight in terms of who you’d like us to interview in the comments of our previous post about Slush. The event will kick off at 9 am EET and the video streams are courtesy of Floobs.

Slush track 1 – Entrepreneur 2.0

– removed (we’ll add the archived the material later on) –

Slush track 2 – Software Developer’s Gathering

– removed (we’ll add the archived material later on) –

Will be great to meet all of you at Slush!

Tori Innovations Comes Out Of Stealth

by Miikka Kukkosuo, November 24, 2008 — Leave a Comment

Tori Innovations has come out of stealth mode and announced they have developed an internet-based social media service aimed to enhance firms’ innovation processes. Tori Innovations aims to lower the costs of their customers by allowing the firms to enhance their internal communications and bring the end users’ and stakeholders’ opinions faster and more efficiently into the R&D processes.

With Tori Innovation’s product it’s possible to collect feedback and ideas from widely dispersed communities of users, stakeholders, and employees, information the collection of which is something not previously possible on a large scale. This is achieved by placing widgets on the sites to allow people to create ideas and post them to the firm. The ideas coming outside the firm can then be collected on the company’s site, and then refined, reorganized, and processed for decision making.

Tori Innovation’s technology is based on spinoff from research of VTT Technical Research Centre of Finland. Tori Innovations has a pilot project in the works with a high profile Finnish customer, which will be announced shortly. Then we hopefully get more details and can review the actual product as well.

Countdown To Slush Helsinki

by Antti Vilpponen, November 23, 2008 — 1 Comment

Slush Helsinki is tomorrow, November 24th. ArcticStartup will be there to cover the event and interview the speakers and visitors. Want us to interview someone special from the program? Let us know in the comments!

Teemu Kurppa Is Leaving Google

by Ville Vesterinen, November 21, 2008 — Leave a Comment

Teemu Kurppa, a mobile software developer and a member of the founding team of the activity stream and micro-blogging service Jaiku, is leaving Google. He joined Google with the rest of the Jaiku team when Google acquired the startup in October 2007.

In his blog, Teemu tells that the main driver for his departure was an illness in his family which subsequently brings him back to Helsinki, Finland. However, he is up beat about seeing his loved ones back in Helsinki and also mysteriously comments that: “on work related matters, I’ve some exciting plans. More about these later”.

ArcticStartup wishes the best to Teemu and his family and excitedly expects whether Teemu will set up a new mobile startup when he moves back to Helsinki. Welcome back to the Arctic region Teemu!

Gaming Defies Down Turn With Venture Capital

by Antti Vilpponen, November 21, 2008 — Leave a Comment

Games to the people!Jussi Laakkonen, CEO of Everyplay, has done extensive research in terms of investments to the gaming industry in the recent years. We also covered Jussi’s previous findings in ArcticStartup close to two months ago when he reported that approximately 2 to 4 million USD are invested into the casual gaming market each week.

Jussi has compiled a nice 2 blog post analysis into the market with discoveries such as investments peaking in July 2008 to the amount of 71M USD in total to the industry. He has also added the MMORPG market to the analysis. It’s clear that the two largest segments in the gaming industry, receiving funding are the MMORPG and the casual gaming segments.

Some of the largest investments made were 9You’s 100M USD, 83M USD into Big Fish Games, 29M USD into Zynga Games and Gaia’s 11M USD financing rounds.

So with regards to my previous post on Betware from Iceland, I asked whether we should cover the gaming industry more, a clear answer from you was – yes, please. We’ll get more insight into this industry in the future as the market is one of the most attractive ones in many ways, not only investments, at this moment.

However, have a read at the full analysis into the investments by Jussi Laakkonen of Everyplay – Part 1 and Part 2.

Photo by A*A*R*O*N (CC:by-nc-sa)

Kuneri Launches Mobile UGC Screensaver Service Pikkoo (Invites)

by Miikka Kukkosuo, November 20, 2008 — 5 Comments

Kuneri, a startup based in Oulu, Finland, has launched a new service called Pikkoo [pik-koo] in closed beta. Pikkoo is a social community allowing free downloading, creating, and sharing mobile screensavers and wallpapers [UGC]. Kuneri was also just selected as one of the nine companies (six North American and only two European) to join 2008 Forum Nokia Innovation Series program. That’s a great achiement, and as part of the program Kuneri will receive business and marketing support.

The service is designed to support Flash Lite screensavers, but the funky thing is that Pikkoo can also create an animated gif file for phones not supporting Flash Lite, so practically the service works with all available phones.

Creating a screensaver

The service looks good, and creating your own screensaver is really easy and fun. Using any of the numerous provided templates I was able to create a pretty nice looking one within minutes. You can also upload own images. All graphics objects can be twisted, resized, and rotated. You can also add various effects to the objects like movement and blinks. It’s also possible to put in a clock, battery level, or network strength indicator. After you’ve happy with the design, you can choose to publish the screensaver in the service, or keep it private. Also Facebookand MySpace apps for marketing and publishing the screensavers are coming up.

There are a few drawbacks in the current version though. First of all, not all the icons in the editor interface are that intuitive, and it takes some time and trials before you realize all things that you can do. The website menu system is also slightly unpolished. The biggest weakness I see at the moment is that you’re not able to download the screensaver directly to your phone from web, instead you have to download it to your PC and then send it to phone with your tools of choice. That’s not going to work with mass market, even I didn’t bother to do it the first night I tried out the service. A related issue is that the file is named after the unique “Pikkoo code” instead of the given screensaver name, which makes it hard to find from the PC – another thing sure to confuse the average Joe. Kuneri is hopefully adding some kind of SMS link push shortly. However, for Series 60 devices Kuneri will offer soon a downloadable Pikkoo client, which allows easy finding, downloading, and installing of screensavers on-device. That really makes using the screensavers easy. Kuneri is also thinking to make a Java-based client for S40 and other handsets.

Once you get the screensaver installed on the actual device, it looks just great. However, on S60 without the Pikkoo client, when the backlight turns off and you press a key after that, the screensaver’s gone right away. With the Pikkoo client the screensaver stays on until you purpose close it, so there’s more value to it. There are also several fancy things you can do with Flash Lite screensavers, including network connection, so we’ll be most likely hearing about very interesting concepts from Kuneri.

The company has been working on, and more known of, their technology tools for creating and distributing Flash Lite applications (e.g. SWFPack launched also recently), but Pikkoo is their step into consumer services. CEO Ugur Kaner hints that they’ve been building the technology base bit by bit, but now they are ready to launch Pikkoo as the first step of their big vision. Kuneri is currently looking for partners who could provide branded content and traffic into the service, getting a new unique marketing channel in return. Ugur commented the revenue model for Pikkoo isn’t that clear yet, and needs to be still worked out.

If you’re eager to try it out, we’re giving out 15 invites to Pikkoo to first 15 who post here a comment asking for one.

Fruugo’s Presentation From SIME

by Miikka Kukkosuo, November 20, 2008 — 1 Comment

Taneli Tikka posted a video of Fruugo “launch” last week in SIME (there wasn’t any product launch as such, most things mentioned where the same as we reported before the event).

The video shows Fruugo’s VP marketing Janne Waltonen giving a presentation and then answering a few interview questions.

Fruugo talk in SIME by Taneli for http://tane.li from Taneli Tikka on Vimeo.

Fruugo will be present today at digital marketing seminar DiVia in Helsinki, and might tell a bit more, although they’ll still not show their actual product.

The Finnish business newspaper Kauppalehti released an article last Friday, stating that Fruugo has “forgotten” (as commented by Fruugo) to leave their financial statement to Trade Register at the end of August as required, but has just posted them a statement of losing the company’s share capital. That doesn’t necessarily mean the company wouldn’t have cash or other liquid assets to run their operations, though, but looks like they’re most likely looking for more money. Also, the previous CEO Reijo Syrjäläinen has left and Fruugo is now run by the company’s operational director Juha Usva.

Is Blyk Done Being A Startup?

by Ville Vesterinen, November 20, 2008 — Leave a Comment

Just as Blyk, an ad-funded, youth-oriented mobile virtual network operator, announced their partnership with Aito, they come and announce that they have closed a significant funding round of 40 million euros ($50.4 million) from their existing investors, which include Goldman Sachs, IFIC and Sofinnova Partners. Considerign the current economic climate this achievement is that much more significant.

But by following the news one can’t but wonder whether Blyk is a startup anymore at all. MocoNews.net, a news site covering the business of mobile content, reports that just as Blyk took in the investment it also announced lay offs.

Here’s a quote from Pekka Ala-Pietilä, Blyk CEO, on MocoNews.net:

[...]we are experiencing tougher times and unpredictable times ahead of us, and we like everyone else are feeling the impact, so we have to be well prepared and to do things differently internally. We are working more smartly, and we have to cut the number of people. But I can’t disclose that number.

So on one hand you have the 40 million euro that just came in and on the other you have a group of people whose services are not needed anymore at Blyk.

As said times are tough for those who try to raise financing. VC funds don’t just give out money, but the firms need to work hard to get it in and commit to certain conditions. Add to that the fact that one of the investors that is part of the 40m euro round is the infamous Goldman Sachs who is known to be cut throat in everything they do, and you start to see why Blyk partly adjusted their strategy (new partnerships with operators), and especially why the people who were there for the  startup stage need to go. The firm is not a startup anymore, but a full blown company that needs professional management, not some quirky founder DNA. At least this is how the investors see it and after all they are calling the shots when one decides to take that route.

We all grow up, even startups. Regardless, ArticStartup congratulates Blyk by pulling this off when most companies are busy telling each other how they should stop thinking about growing and start thinking about surviving.

Here’s what a Finnish serial entrepreneur and dealmake Taneli Tikka makes of the news.

Betware, Another Gaming Solution From Iceland

by Antti Vilpponen, November 19, 2008 — 2 Comments

Betware is also another of Library House’s nominees for the 100 hottest companies to change the media technology industry. Like the name suggests, Betware is into providing online gambling and gaming platforms through turnkey solutions. The company itself is relatively old as it has started operations already back in 1996.

Betware has had enough time to build a very respectable and admirable business proposition for its clients through it products and solutions. The platform truly offers all the necessary modules and tools required to start a gaming site and get it going – hence a true turnkey solution.

In terms of games, they have developed over 100 games categorized into number games, sports betting games, racing games, instant games, casino games, multiplayer games as well as live betting. Betware also claims that these games are all playable through the mobile phone, internet as well as in some cases in the future, the digital television.

There’s definitely a large ecosystem of different kind of gaming in the Nordic and Baltic region, be it mobile games, casual games or money games like in the case of Betware. What are your thoughts, should we cover these topics more in the future as well?