Looking Past "Finland Post Welfare"
Students in Finland have come a long way in a few years. Last night, Finland saw one of its most impressive events in support of growth entrepreneurship - all organised by a small group of passionate students. What makes this all the better, is that the event was covered by numerous national media and the panelists at the actual event included the hotshots of Finnish business environment; a mix of very influential business people and a group of startup entrepreneurs. The event was called "Finland Post Welfare", questioning the things Finland should work on to sustain its welfare status. It was put together by Aalto Entrepreneurship Society.
We live blogged the event last night in English as the event itself was held in Finnish. As it's not the best use of anyone's time to suggest that you go through the logs - we'll do our best to summarise the event in this post.
One of the goals of the event was to talk about the things Finland should work on to sustain the welfare state in the future. While not many concrete solutions were proposed, the discussions did raise valid points about numerous things.
One of the key issues that was talked about was the role of the government in supporting the growth and creation of startups. Opinions ranged from Björn "Nalle" Wahlroos' views of "let the market handle things" to more conservative views by Risto Siilasmaa like that of the Vigo program. Siilasmaa stated that government help is needed to catalyse and multiply the work of the private sector, not try to compete with it, especially in the early stages.
The panelists also more or less agreed that Finnish entrepreneurs are not ambitious enough. Björn Wahlroos stated that in the Finnish edition of the "Who Wants To Be A Millionaire?" contestants always walked away with the smallest wins. The contestants avoided risk and according to Wahlroos this same mentality is seen everywhere in the Finnish society.
Wahlroos, at one point, seriously questioned why everyone is wanting the government to participate in the market economy and in doing so, raised a good point. We shouldn't become too narrow minded in our views - nothing should be taken for granted when looking for new ways to create wealth and success.
Ollila and Wahlroos stated that taxes need to be lowered in order to make Finland more appealing. Interestingly, not many Twitter users tweeting about the event agreed on this - it seems like the younger generation is at ease with the current level of taxes. The way I see this is, that we Finns may be fine with it but it's really hard to justify any foreign investments with high taxes. Finland has to become more appealing on an international level as well.
Finally, the reason everyone should celebrate the event and its outcome is not because of the concrete results it offered for the politicians or members of the media, but because it showed students especially, like other Finns seriously care about the future. 9 buses full of students arrived to the event from 9 different venues. Overall, it was stated that approximately 900 students participated. This signals a clear change in attitude in support of entrepreneurship that has already begun.
Let's celebrate the fact that this many people (about 1700) showed up on a Monday evening to voluntarily listen how they could make Finland a better place.
Let's celebrate this, but then again get back to work as there's lots of it left.
It is amazing that you pulled this event together. Well done!
Here my feedback about the event:
It doesn’t really impressed me ;-(
Ollila: vague answers and nothing concrete.
Koponen: I liked, he understood really what “risk investments” mean. Having a broad portfolio of sturt-ups, some company probably will fail but some will succeed and the exits from those that will succeed will cover the investment of those that will not. This is what in Israel and in the US angels investors have been doing already for years. Definitely in Finland we do not really understand yet the real meaning of “risk investments”. In Finland the potential “angel investors” is much higher than what we have actually.
Aspiala: a good example of doing. As the “Rules of the Bazaar” says “do not think what to do, but do and think and adjust if necessary”
Wahlroos: he really do not understand what “risk investment” in this mobile/web industry is, but of course he is a banker, that’s the reason. With his own capital he could starts as “angel investor” and build his own fund of millions of euros and fund tens of start-ups. But as I said he do not understand it.
Siilasmaa: good, I liked the “kiihdyttämö” stuff and I would like to hear more about it, I should contact him. We need more things like that. With the involvement of the government into this we have to be careful, it could slow down the initiative with the bureaucracy. We need actions now and less political speeches.
Miettinen: nothing to say, and he did not talk too much as well.
Overall a good event, even doesn’t impressed me, the very positive thing is that students and young entrepreneurs now seems the they took the lead, as no one wanted before, no the politicians, no the big companies like the one we have in Finland ;-). No we need more events like this and we need more actions. We need a kind of “revolution” mindset here. The problems that we are facing in Finland are the same problems that Europe is facing, the lack of seed investments for start-ups. Then the fact that if you fail, you got a stamp on your face, you will not get anymore loans or whatsoever, comparing to Israel or US where before you will be recognized you have to fail 2-3 times. Then as in my speeches at conferences I always say, “Facebook and iPhone changed everything”, consumers mindset and attitude, investors mindset and attitude, developers mindset and attitude, but do we understand that, have a look at my presentation on Internet.
Then the last but not least “before you can understand the present, you have to understand the past, after that you understood the past and the present you can try to predict the future”.
Big thanks to Aalto students.
Congratulations to the Aaltoes team (as well as the other ESs) for pulling this off. You're doing what politicians, media and other organizations haven't been able to: making this issue public.
Antti: thanks for the live blogging in English! it was nice to be able to follow this from here.
The challenge in Finland is seed money. If you can show product/market fit you can get financing from anywhere but if you don't have the resources to get there (or close enough) you're always struggling. Finland's doing well with the pre-seed money, although sadly in many instances it's wasted. A bit of market research or some consultancy really doesn't get you very far and as we know, it's surprising what turns out to be successful in the end regardless of how people answer questionnaires.
The ridiculous thing is that getting to product/market fit doesn't take that much in web and mobile. How much did Fruugo burn up? 40m euros? That's seed money for 400 web/mobile startups.
What's needed is a big seed fund liberally and quickly handed out. That would excite entrepreneurs; bring talent and investment to Finland; allow us to learn a lot about entrepreneurship here (who can actually pick winners and losers for one thing); and pay for the education of a new generation of entrepreneurs (if nothing else). You'd imagine you'd get a few success stories out of it as well.
Great event and huge crowd!
Regarding the discussion, it was unfortunately on a quite high level. Nalle was arguing that the government should not be involved in the early stage. I tend to disagree. As e.g. Petteri was proving, the government gets most out of the growth companies through taxes and related payments. They might actually the only party to benefit - especially if the companies fail. Therefore they must "invest" - not just collect. But not directly.
The real problem is the lack of ownership for the money spent and the absence of global competence. This can only be provided by private players. Therefore government money should only be spent on catalyzing the success of private players, like they have done in Israel.
National media.. sigh.. Helsingin Sanomat had nothing, MTV3 had nothing, YLE nothing, Kauppalehti nothing. Frustrating.
>- it seems like the younger generation is at ease with the current level of taxes.
They really haven't paid them yet... :P
Timo Norros:
Or they understand that it's taxes that keep welfare society rolling and they like welfare enough to be ready for the sacrifice.
Also, they probably just haven't forgotten yet how much the government has helped them during their lives by giving them the support and education that makes them able to make companies grow.
Sure, lowering taxes could bring foreign investment, but it would also mean bringing down the welfare state. We're not exactly suffering up here when it comes to competitiveness, even with our high taxes, so why destroy what we are good in? The key is in finding the perfect misture of "right amount of competitiveness" for "maximum welfare". Our ultimate goal is welfare, or am I mistaken?
mattiv:
>Also, they probably just haven't forgotten yet how much the government has helped them during their lives by giving them the support and education that makes them able to make companies grow.
That was sort of my point. People seem to get bitter only after 20 years of spending half of their salary to taxes with a bad return of investment. I'm not against welfare, I like Finland (I would rather born to a random family in Finland than to a random family in many other country) and I also believe the well-being of the citizens is the ultimate goal of our beloved country. However, I think it would be possible to provide even better services to Finnish citizens with a significantly lighter and more dynamic system and with less public employees. That would also enable lower taxes.
Clearly some of our systems, ways of action and general assumptions are outdated - that's why this panel was so popular and many people seems to be fed up with the current stagnant politics.
I agree that public money could be used better, but just how does lowering taxes make things automatically better?
Maybe the taxes could be lowered after the services actually have gotten better and proven functional with less spending. Otherwise it's just throwing the society into water and hoping it learns how to swim.
>Maybe the taxes could be lowered after the services actually have gotten better and proven functional with less spending.
Yes, it can only happen in this order. Just lowering (or rising) taxes has little effect on anything. I believe this 'rise few percentages of certain tax there and lower other tax elsewhere' type of politics (=marginaalipolitiikka) is exactly pissing people off. Tuning the engine doesn't help when you need to renew its parts. In other words, if a small startup can save 3% in staff expenses they probably won't be able hire new people and improve employment. I think one easy and efficient way to help startups is to reduce the administrative burden of young companies and otherwise lessen the risks related to growing your business. This was mentioned in the panel at least by Tina Aspiala.
Still, my personal opinion is that we should ultimately strive for lower taxes and people should have more freedom on how to spend their wealth. It doesn't make any sense to me that as technology and general advancement enables many services to be more efficient, our public sector doesn't get any lighter.
The tax issue is a total red herring. Of course it would be nice to have lower taxes and of course it is frustrating to see public money wasted, but I doubt there is one instance in the history of entrepreneurship where someone with a great idea chose not to found a company because he was worried that if it becomes a success, he will get a bit less rich.
You know which states in the US have the highest tax burden? California and Massachusetts, the two tech hubs.