‘’The markets are on the web, the production power is on the web, both globally available for everyone’’ Mårten Mickos, CEO, Eucalyptus Systems.
Let’s do a small intellectual play: Web 2.0 services, or the current generation’s internet companies globally, are built for the most part on top of the so-called LAMP-stack. In other words their infrastructure is based on Linux, Apache, MySQL and PHP – a selection of open source software programs.
The ventures started today differ from the ones in the -99 era in a way that a growing number of them have managed to create very big global business in a unbelievably short amount of time. They have managed to create hundreds of millions of profitable business in a span of just a few years, and new ones seem to emerge on a daily basis.
"Open source, in other words, is not an end in itself. It is a means to an end, and that end is collaborative innovation’’ Matt Asay, COO of Canonical
The other differating factor is that using open source and collaborative work methods has made possible an extremely cost-efficient way of testing new ideas and concepts. If "it" does not work, a different approach is tried right away. Unlike in the days before when writing a business plan might take a year (literally).
Most of the building blocks are from the Nordics
Linux (Linus Torvalds) and MySQL (Monty Widenius) are Finnish born ventures (while Swedish David Axmark played a key role in MySQL as well). PHP, on the other hand, originates from Denmark (Rasmus Lerdorf). So half of the building blocks are from Finland, with a quarter from Denmark, meaning 75% comes from the Nordics.
But Finland’s and Finns' accomplishments don’t end here. As I was sharing the observation with my former colleague Tere Vaden, he reminded me that the discussions around the open source development more or less all happen online and more specifically in IRC (Internet Relay Chat). And you guessed right, IRC was developed in Finland by Jarkko Oikarinen out of Oulu, around 1988.
One explaining factor for this success could be contributed to the way Nordic society has been structured as several proofreaders of this article duly noted. Nordics are a safe, neutral place to try out new things without (too much) having to fear someone will take advantage of you but rather you will be recognized by principle of meritocracy.
China’s and other emerging, or rather growth, countries' efforts around open source have made a lot of headlines in recent years. But how did, for example, Linux make its way to China? The story that should be told more often is that Helsinki University’s doctoral student Dr. Gong Min upon returning to China in 1996 had 20 diskettes in his luggage containing that moment’s version of Linux. Shortly after that first Linux distro (collection of software) was available in China.
A new, higher ambition-level is needed
Now that even Venture Capitalists have seen the proof of making money around open source, both revenue-wise and exit wise (I was fortunate enough to be part of a team that made the seed investment into MySQL ten years ago and enjoy the 1 Billion USD exit in 2008) as seen in all parts of the globe, it is time to think of next steps. We need to take steps where, for instance, entrepreneurial open innovation and the practices of the open source world would be embraced. We should operate and create both cooperation and collaboration possibilities utilizing international talent networks in a global market place. One way could be a new type of an investment vehicle, which through active ‘open innovation’ guidance (freedom to test and fail easily and quickly) would capture value by retaining part of the ownership in new companies. At the same time it would work as a network serving both industrial and academic worlds.
This kind of new and higher ambition-level is needed. Otherwise the Finnish and Nordic innovation activities especially the kind that is looking for high growth internationally via Venture Capital will wither in our too small home markets and will endanger our future competitiveness.
Big opportunities must be embraced
Open source and its way of working and building community built and driven businesses must be one of the biggest things to impact software and software based businesses in decades. The disruption is not limited, however, only to open source software but to the growing amounts to open content, open data and open substance.
Based on our history I dare to predict we have yet again in the next few years a big opportunity in front of us. The global markets are waiting for our leadership just as Nokia did in the mobile business – we must not let this opportunity pass us by.
Thank you for proofreading and comments to Valto Loikkanen, Jouko Ahvenainen, Peter Kelly, Aape Pohjavirta, Ossi Pöllänen, Karri Hautanen, and Peter Cheng.
About the Author:
Mikko Puhakka: I am Amateur consultant and investor rather than a professional. What? – You may ask. With more than 15 years of noted track record, why an Amateur? Amateurs in sports are - or at least used to be - in highest regard. Amateurs do what they do because of love, inspiration and passion for their specialty. Amateurs don’t do their business for quick and easy money. Instead of living my life from paycheck to pay check or project to project, I live from adventure to adventure. As Hugh McLeod states ‘treat it like and adventure. An adventure worth sharing’ If this thinking strikes a chord, get in touch and share your thoughts and initiatives. In return, I promise at least an opinion, sometimes a good discussion or possibly even a new business relationship. Amateur career specialties: Start-ups, Venture Capital, community driven businesses, mainly in Europe and China. I am available as a mentor, advisor or a board member.