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A country full of incubators and accelerators that produce the brightest ideas. A long history of technological innovation and the birthplace of unicorns such as Skype, Spotify and iZettle. Sweden seems like the perfect place for startups and scaleups. As you would expect, in such a highly developed environment, competition is fierce. Fredrik Hånell, a business developer at EIT Digital, supports scale-ups that want to enter the Swedish market. He shares his thoughts on scaling up to Sweden.
Fredrik Hånell supports Swedish scaleups who want to expand to other markets in Europe or beyond and foreign scale-ups who want to enter the Nordic countries Sweden, Norway and Denmark. The EIT Digital Accelerator helps European tech companies in the field of Digital Wellbeing, Industry, Finance, Tech* and Cities. As such, Hånell is currently involved in the transition of five different scale-ups, as they make way to the Nordic markets. It is safe to say, he is an expert on what to do and not to do if you are trying to make it in Sweden.
1. Make it big in Europe
“It is a challenge to scale up in Sweden”, says Hånell. “There is a lot of competition. Ideas that work at home, might not make it in Sweden. A common reply to a sales pitch is: ‘we already thought about this and we implemented it years ago’. There are lots of incubators and accelerators with new ideas, where startups can spin off existing companies. And new Swedish companies immediately tend to think globally. So, you need to be two steps ahead of the market if you want to pitch in.”
For anyone up to the challenge, the rewards can be very high. Hånell: “The Swedish market is relatively small, but the Swedes are very tech-savvy and there is an aptitude to purchase the latest digital services and products. More importantly, Sweden is considered a great stepping stone for companies that eventually want to expand to other markets and even to the United States. Coming from Sweden is a quality stamp for the US market.”
2. Ditch the suit and tie
Swedes don’t like you to oversell your product. Hånell: “They are pragmatic people and they don’t want to get the impression that you’ll say whatever they want to hear. Make sure you back up your claims with actual facts.” This doesn’t only concern the words coming out of your mouth, it also goes for the clothes on your back.
“If you’re a banker, you get away with wearing a fancy suit and a tie. But usually, the dress code is very informal. If you’re a scale-up, people expect you to be an innovator and they expect you to dress in a certain way. If you overdress, you lose credibility. They’ll wonder: ‘are you really that desperate? Are you selling too much?’ This is not the USA, where overselling might work. Swedes will likely lose confidence in you.”
3. Stockholm’s nice (but so is the rest of Sweden)
The first place you may be looking at when opening up an office in Sweden is the capital city of Stockholm. But is this really the place to be in Sweden? “Stockholm does have the highest number of incubators and the best accelerators”, says Hånell. “And about 99 percent of the VC’s are located there.”
However, Stockholm is not for everyone, warns Hånell. “Living expenses in Stockholm are high and logistics are harder. There’s also a large number of businesses set up in other cities, like Gothenburg. These are less expensive and smaller. It is easier to find housing for staff there.”
4. Take advantage of the heritage
What do Spotify, Tele 2, DICE, iZettle and Skype have in common? They all started in Sweden and grew out to be massive companies operating on a global scale. It is a testament to the Swedish culture of innovation and entrepreneurship. These companies are still located in Sweden, where they employ massive amounts of programmers, says Hånell. “With such a demand for developers, the level is very high. Technical education is well above the global standard.”
But the tech-savviness of the Swedes goes further back. “Swedish companies like Ericsson have been building devices for ages, which you can still see in the Swedish IoT landscape of today. Their heritage lives on. Also important is that those companies have influenced the mindset of doing business in Sweden. They paved the way, everything in Sweden has been influenced by them. From politicians all the way down to individuals who know about startups and have a positive attitude towards new technology and fresh ideas.”
5. Don’t sweat it when trying to set up your business
Starting a business in Sweden is not rocket science. With a well-structured business environment such as the Swedes have, Hånell says it’ll take you only weeks to get the formalities done. And you don’t have to go at it alone: “There are a lot of networks, incubators and accelerators to help you out with everything you need. Especially for the first couple of years of your startup, you’ll find lots of support.
In Stockholm, you can find the startup network Sting, for instance. In the Northern part of Sweden, there’s for example Uminova. And there are governmental grants, like Vinnova to help you hit the ground running. And don’t forget, Sweden is very international. It is not a requirement to speak Swedish at all.”