Thoughts On Iceland And Its Startup Scene
I'm in Reykjavik, Iceland, hosting an ArcticEvening event for the local startup scene tonight. I thought I'd do a little write up of the thoughts and discoveries regarding the startup scene up here. First of all, to put things into perspective, you need to understand the size of things we're talking with. Iceland has a population of around 320 000 people and that's scattered across the island. On the other hand, they're a relatively wealthy bunch of people, despite the current economic crisis, with a GDP per capita a little over $40 000 USD for 2008. Talking about the econmic crisis, it is definitely the biggest subject in discussions these days. On my way to meet up with some local entrepreneurs last night, the cab driver said that he's sure there will be something happening in the coming months. According to him, "regular people are tired of paying the mess of the large companies." I can understand his rage completely.
Nevertheless, I talked with Gunnar and Brian from Clara as well as Viggo and Asgeir from Meniga last night regarding the local startup scene and how they see the situation here. The general mentality was that things are relatively well off, compared to the rest of the economy. The government has also taken some actions to create a better ecosystem for startups in Iceland. They've given investors some tax incentives regarding their exits in startups - something the rest of the Nordic region should implement very quickly as well.
For startups, the economic turmoil and crisis hasn't been all that bad. Viggo and Asgeir used to work for Landsbanki last year, but resigned to start their own company Meniga this January. Since then, many of their ex-collegaues have felt the economic difficulties through layoffs and today banking isn't seen much of an appealing industry anymore. Long gone are the days when Iceland had plans to become the banking centre of the world. I kid you not, this was the mentality when things were flying high.
After the crash, a lot of talent has been released back to the job market and this is of course to the advantage of startups. Before the crash they couldn't compete with the salaries the banks were paying people, but now as there is a shortage for work, people are settling for less pay and startups are taking advantage of the situation. Furthermore, as companies are trying to avoid bankruptcies, startups find it easy to negotiate good deals on office space.
After a while I realised that Iceland isn't so much different from the rest of the Nordics in terms of startups and the ecosystem, but there are some advantages for being a small country as well as challenges being physically farther away from other countries. For one, the government works a lot faster than in other countries based on what I heard from the four gentlemen. This has a clear advantage of getting good things done faster as there is less bureucracy. Also, being a small country which is very well educated, it serves as a perfect test bed for many companies. The people here are willing to take up new methods and services relatively easily so startups are finding it a great place to launch products.
However, being physically a long distance from other countries they find it harder to jump to new markets as none of the companies consider Iceland their main market. There's only so much you can do with a little over 300 000 people market. Then there's the other side of sharing ideas and getting them tweaked for the better. Being so isolated, it's very hard to share ideas with other people on a cross border level - something that would definitely benefit the receiving country as well as Iceland. This of course is something that we at ArcticStartup wish to help in.
I'm anxiously looking forward to tonight, being able to meet the local startups and what they are up to. We will be posting interviews and coverage of the local startup scene here in Iceland in the coming days as I get home with the footage. There's just too much going on to neglect it. If you haven't yet read about the ArcticEvening Reykjavik, please do so - it will be a blast!
Before finishing, I'd like to thank Brian Suda a ton for helping us put together the event here in Iceland - he's been an enormous help! A very big thank you!
Image by Stuck in Customs
5 Comments
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Hi Antti,
great post, keep us updated.
I think the economic chrisis is a great chance for island to become a technology leader in the next couple of years. the Icelandic people have to be creative and they have to think in a new way. this is a great environment for startups.
recently I read an article about a project team that is looking into replacing gas stations by electricity stations. since there are only 1000 gas-stations on island it wouldn't be too cost expansive to implement. island would become the #1 test market for the car industry. this is great thinking!
best
daniel
Daniel,
Here's an interesting piece on the developments http://www.thedailygreen.com/living-green/blogs/cars-transportation/iceland-president-clean-cars
"With its ultra-cheap electricity (as low as 2.5 cents per killowat hour), Grímsson estimates that consumers will be able to drive their EVs for a year on what it now costs to fill their cars up once or twice with gasoline. "Our greatest stumbling block is getting the EVs actually on the road here and on the world market," he said. "The car producers are not yet able to meet the growing demand."
...
The President is also bullish on a concept advanced at the conference: A united Nordic market for EVs. "The five countries have a population of 25 million people and constitute a significant market," he said. "We could evolve unified laws and regulations for electric transportation."
Another option for a compact geographic area like Iceland could be http://www.betterplace.com/
Antti,
Look forward to hearing about how the event goes. The whole financial situation has 'reset' the system so to speak and I think now more than ever it's a great time to be involved in entrepreneurship and startups. Especially, here in the Nordics where we have an abundance of well educated people in some key areas like IT and cleantech.
We just need to make sure that we can pull all the combined energy of the Nordics together and pool the talent, resources and knowledge to compete globally. Like you mentioned Island is only small, and even though the total area covered by the Nordic countries is huge are combined population is quite small, more the reason that we need to share ideas and resources.
Great post though and super initiative.
Are you guys doing anything in Copenhagen, anytime soon?
Gus
Hey Gus!
Thanks for the comment. We actually organised an event in Copenhagen in June this year, but will most definitely be looking at organising another event there sometime in the near future.
We'll try and give you a shout out when we'll be organising an event there!
[...] come to realise that Iceland is simply too small for them and that’s no surprise, based on my previous experience talking with [...]
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