Kim Väisänen is known for several successful internationalization projects – not only has he won President’s Internationalization Award twice, he has also shared his experiences in his book “Väärää vientiä”. This doesn’t mean he thinks that everyone should aim abroad. First of all, not all startups in Finland are able to breach foreign markets. There are a few key issues stopping Finnish startups from developing enough in the domestic market. For one, Finland is in the Global Competitiveness Report at the 97th spot. That’s far away from our Nordic neighbors. “Even Vikings were created by the strong headwind. It makes you strong when you have to compete and struggle, and clearly, Finland is lacking that in the startup world. It’s why some Finnish basketball players are now doing great: they get to compete with the best. That’s how you become the best”.
There are also strategic mistakes done by many startups. “Many companies spend their money travelling around, not really thinking what could be the best market for them to try to enter. Sweden is by far the best market for Finnish companies, but I have met with company representatives in Dubai and really expensive hotels in Japan. It makes no sense”, Väisänen comments.
So how can you select the best startups that actually have potential to scale up abroad? In terms of figures, there are a few key rules: if the company is not expecting revenue in the near future and no one is willing to pay for their service, that should be a red flag for an investor. “A 18-month-runway” is also a good rule on the burn rate and the success of startups sales progress: if the company is dead in less than 18 months since your investment, it probably is not going to stay alive for a long time. Väisänen concludes: “You can do a very detailed due diligence, but still you should trust your intuition.” And it can be learned, intuition is not only something you are born with: “In startups, energy always wins strategy, so trust your intuition that’s based on the team’s energy!”
