Figured I’d add my opinion on what Joachim Lund’s writing about the Norwegian startup ecosystem this morning (article written in Norwegian). Said article begins with addressing the lack of Norwegian unicorns, and ends with saying that this could be solved by having more startup accelerators in Norway (because that’s what they do in Sweden/Finland).
I believe we all would like to see (more) unicorns coming out of Norway, especially with the oil price falling and all, but I do not agree that local accelerator programs are the solution (as in what we should prioritize). While I have tremendous respect for the people behind both Startup Sauna and STING accelerate, knowing that they add a lot of value to the companies they work with, I also know that none of the aforementioned Nordic unicorns (Spotify, Zendesk, Supercell, Klarna etc) went through any accelerator.
And to avoid confusion, let me first define what I mean by an accelerator program. From Wikipedia (emphasis mine):
Seed accelerators also known as startup accelerators are fixed-term, <a href=“https://en.wikipedia.org/wiki/Cohort(educational_group)” title=“Cohort (educational group)” target=”_blank”>cohort-based programs, that include mentorship and educational components and culminate in a public pitch event or demo day._
Furthermore, accelerators are typically market-focused, as stated in this Mashable-article:
“Entering an accelerator without a product is like going to a car race with a bicycle. You have to have something to accelerate.”
So, knowing that accelerators are fixed-term programs for early-stage startups, focused on market-entry, the questions becomes whether this is the way to produce the next Norwegian unicorn?
There are accelerators that “produce” unicorns. Or, to be more precise, there is only one accelerator that has ever produced unicorns; namely Y Combinator (afaik no other accelerator has done this to date). Airbnb, Dropbox and Stripe have all graduated from YC, and according to these companies YC has played an instrumental role in the development of these companies. But in my opinion there’s two reasons as to why this still isn’t something we should focus on in Norway.
Firstly; an accelerator works best for a startup that has a product, and want to launch it in a market. But if you’re a team with a great product; why do you want to launch it in Norway? Like, we’re a great country and all that, but we’re just 5 million people! If I have the flexibility to join such a program, and want to work my ass of for three months to launch my product, I’d rather try to enter a bigger market right away. Innovation Norway are doing some great stuff to help Norwegian entrepreneurs through their TINC programs, and there’s of course also always the alternative to apply to one of the more renowned international ones.
Secondly, in the period that Y Combinator has produced 3 unicorns, the rest of the region has built some 30 other unicorns, none of whom have graduated from any one-size-fits-all accelerator program. Because, to let you in on a secret; the one size does not fit all. Google, Facebook, Twitter, Salesforce and Workday are just some examples of companies that never belonged to any “batch”, they just succeeded building companies the old-fashioned way: raising money from competent people, working extremely hard and building a great product.
While we can’t do much about the last two, I’d be very happy if we collectively focused on incentivizing private investors, by giving tax deductions to those who dare invest early. Not only to accelerator programs, but to all private investors that dare take the risk on early-stage entrepreneurs. Private investors prefer to invest in things they understand, meaning that entrepreneurs will have have better access to competent people with capital (business angels). Good angels don’t just contribute over a fixed-term period, and they do much more than just market-entry.
I’d like to see us talking more about how we can engage more of these people.