Clearly not every start-up makes it, and in this sponsored series for Tekes we thought it would be good to also look at a "failure story" of a company that was previously on Tekes financing. We got the chance to speak with Kai Lemmetty, previously from Floobs, about his experiences with Tekes funding.
Floobs was a live video streaming service for sports clubs and bands, allowing users to record and stream video from mobile phones and supported video cameras. The company was started in 2007 before mobile live-streaming was even on the radar, and could be somewhat compared to what Bambuser is today.
Floobs had an angle towards bigger organizations though, a typical use-case of the service would be Sevilla live-streaming their games and other material. The company had many sports clubs using their service, as well as two big Finnish bands: The Rasmus and Don Johnson Big Band.
Lemmetty and his co-founder, Joonas Pekkanen started the company in 2007 after meeting at the Akateeminen Yrittäjäklubi, somewhat of a precursor of Aaltoes in Helsinki. "We both had similar ideas about live video streaming for mobile phones, and we just started doing it. We didn't really figure out the business model in the beginning, and that was one of the biggest problems with the company."
Floobs received a couple rounds of investment from private investors, while also leveraging R&D loans from Tekes to maximize the amount of money they were able to operate on. Still they had trouble bringing in revenue. Lemmetty says they eventually found a method to monetize the service, but by that point in time in 2010 it was too late and they essentially ran out of money.
Lemmetty says they had good cooperation and support from Tekes while Floobs was struggling. The winding down process was also straightforward, without much to say about it.
I asked Lemmetty if he felt like Tekes shuns entrepreneurs whose companies didn't make it, but it appears to be quite the opposite. Lemmetty is actually a member of the Steering Group, which helps make decisions on the strategy of Tekes Tempo. There his opinions and experience are used to help shape Tekes into a more flexible organization.
This was somewhat surprising to me and good to hear in a country that had a "National Day of Failure" only last October because many feel the Finnish culture has trouble accepting and moving past anything but success. Anyone who attended the Steve Blank events last fall also has to remember the line he repeated at all of his events, "In Silicon Valley, we have a word for failed entrepreneurs: Experienced."
Today Lemmetty is now working on a new project, called Snipplist, which we covered a couple weeks ago. Put simply, Snipplist lets you snip "snippets" of text from anywhere on the web using a bookmarklet and share them with your friends. All of the snipped text can be found on the website, which also links back to the content so you can read it in context. Snipplist falls into the social discovery category with Pinterest and other services, and is a neat way to share that paragraph or great quote that doesn't fit in a tweet.
It should also be noted that his co-founder, Joonas Pekkanen is currently running Flockified, which furthers proof that you can move on and still be taken seriously with Tekes. Read our past interview with Pekkanen on his opinions of the Tekes Bureaucracy.
Snipplist is still very young and not currently looking for funding. "But if it takes off and we need to raise funding for the project we would definitely look into doing a Tekes project," says Lemmetty.
Hear it from startups
This series of posts is sponsored by Tekes and produced in co-operation with ArcticStartup to share experiences from startups about their funding experiences.