Here’s the first startup of a run down of startups that I saw at the Nordic Venture Forum last week in the beautiful city of Copenhagen, Denmark. All the startups present at the forum were seeking either financing from the investors or partners for their business.

Zero Point Software (Denmark) - Zero Point Software is a developer of intellectual properties in the video game space and their offering was two fold:

1. They were looking funding for the game they were developing, namely the Intersteallar Marines.
2. They were also ’selling’ Real Time Voice Porting to the VCs present. Real Time Voice Porting is a technology they had developed specifically for games.

Interstellar Marines is a AAA science fiction First Person Shooter video game aimed at the PC, Xbox 360 and PlayStation 3 platforms. The game is positioned in a highly competitive but also equally profitable segment. According to the guys behind Zero Point Software PC and console sales passed $30 billion dollars in 2007, of which shooter games accounted for approximately 10 percent.

Real Time Voice Porting for it’s part is a patent pending technology. It makes the gaming experience that much closer to what it would be in real life. For example if you talk to other users in a virtual bathroom while playing the game, you will experience how the reverberation affects the sound of your voice. In a similar fashion, shout your lungs out in a virtual valley and you will hear the echo of your voice.

In addition to the Interstellar Marines game itself and the patent pending technology Zero Point Software wants to rethink the game distribution model: the company aims to sell Interstellar Marines directly to the consumers without the need for a publishing deal. Whereas now a consumer pays about 75euro a game, the company wants to push this all the way down to 30euro a game.

The company also aims to build a social network around the game. It hopes this will reduce the investment risk by creating proof of market, ensure great quality through large scale focus testing and generate early streams of revenue. It aims to do this by letting the users play bits of the game along the way its developed, thus trying to get the gamers hooked and come back for more while at the same time creating a buzzing viral word-of-mouth.

The founders also emphasized that the game needs to be easier to access than pirated games, which would mean a user could play first 30 minutes for free and only after that she would have to pay if still interested.

The game trailer looks as good as any, even though it’s a long way from blockbusters such as Halo3. Similarly, I have no doubt that the patent pending technology can be a success. What I doubt though is whether you can bypass the publishing houses as Zero Point Software is planning to and still reach a wide enough audience for the game to take serious market traction. Whatever you think about the big publishing houses, they still play a critical part in the marketing of the games and thus creating the awareness among the bigger gaming public. You’d need to have a hell of a game if you plan to be the next Halo3 (or a bigger hit) just with a viral word-of-mouth. That said, the startup is not just talk and no action -The Interstellar Marines trailer has already passed two million downloads and gotten an average user rating of 9.2 on GameTrailers.com. Nice going!

Many of the facts and figures are from the good people at Nordic Venture Forum.

Growth Forum 08 (in Finnish, Kasvufoorumi08) is an initiative that started on January this year (see the previous post). The forum is an initiative lead by Microsoft Finland and Association of Software Entrepreneurs. The second seminar of the forum was held in June and now when the thematic group I’ve been involved in is on holiday it’s time for a little recap of the first half of the year.

First of all both seminars have been successes from my perspective as they have attracted a mixed audience of entrepreneurs, seasoned professionals and representatives of public organizations. For example, in the second seminar Jyrki Katainen, the current Minister of Finance of Finland, held a passionate speech on how important it is to cultivate innovation and intellectual property for Finland to succeed in the future. Furthermore, as the national innovation strategy was also published in June, the government is definitely taking steps to ensure that Finland stays competitive even when the number of employed people decreases as a result of aging of the population.

The findings of the second seminar (and the interim project report delivered to Mr. Katainen) and our small thematic group were surprisingly similar. The group’s focus was the question whether Finnish startups should make exits or grow themselves. Based on several discussions seems that Finland does not lack technology, skills or education to succeed in the Internet era. Rather the obstacles on road to success are financing and attitude. The early stage financing of startups is largely made by TEKES, which in general does a good job, but would require more support from private venture capitalists. There are some ongoing public initiatives to provide tax benefits early stage VCs and business angels. However, it is too early to tell whether these legislation changes will happen.

The attitude issue is much harder to address, but I believe solving it (even partially) would have much wider implications than improvements on financing. Some of arguments for not to start new companies are reasonable, such as heavy penalties and social stigma of going bankrupt. Most growth-oriented startups fail and they should be allowed to do so without personal consequences such as not getting housing mortgages after companies go bankrupt. However, the other arguments are frequently not based on facts. The public discussion revolves around on how hard the taxation in Finland is or how entrepreneurs must constantly work and get stressed because of that. Furthermore, I have heard many people say “I really would like to start a company, but I lack a good idea”. Very very rarely anyone can up with an idea that truly is unique (no-one has thought of it) and can be turned into a profitable business. I believe everyone can come up with good ideas from their everyday life (”isn’t there really a better way to do this?”). A good way to launch a startup is to pick a decent idea, found a company and then figure out the next idea or iterate the existing idea. A good article on ideas can be found in favorite blog onstartups.com.

Moreover, we need stories (from successful entrepreneurs) how working as an entrepreneur can be both fun and rewarding. This was one of conclusions of our thematic group. In addition, we agreed that startups need teams that have a varied cultural and knowledge background, not just the “four Finnish engineers”. Finnish startup scene would also benefit from a Finnish Y-Combinator that would give a needed boost in the early stages. I would be very interested to know if there already is some Finnish VC (or other party) that has plans like that.

In conclusion, we need positive buzz on startups, being an entrepreneur and really aiming for growth.  I think we are going to the right direction on those issues. What are your thoughts on these subjects?

Are you aware that sailing enthusiasts earn annually almost double the income compared to amateur golfers in the US? That was news to me when I chatted with the co-founder of sailingregister.com (later abbreviated as SR), Vesa Lindqvist. They have tackled a tightly defined, but potentially lucrative, niche of sailing races.

SR offers something for all parties that include spectators, sailors and race officials. SR’s key service is a secure sign-up system for sailors and race organizers. Sailing event organizers also lack proper services for providing race coverage for sailing spectators ashore and home. SR proposes to provide a reliable, secure and feature-rich alternative.

Their initial business model is to charge a premium from fees collected from race participants. However, the founders have a strong background of mobile business and we can expect the service to offer a range of premium rate mobile services for spectators in the future. Furthermore, they plan to offer social network driven marketing services to advertisers targeting this high-networth customer segment.

With many vertical social networks currently popping up this space is also contested with players such as Regatta Network and Compete-at-sailing. However, I believe SR is on the right track as they target enterprise customers as well with their marketing services. One has to bear in mind that according to Mr. Lindqvist, the total size of the sports industry internet spending in the US alone is circa $239 million.

SR is currently self-funded. They continue their negotiations with lead customers so that they will be ready for sailing season 2008.

I wish the SR guys all the best and good sailing.