Here’s some pointers on what’s wrong with the way government tries to create growth.
It’s from an interesting podcast by @trendsonlinedk with @kaspertidemann founder of danish startup @meeho that’s based in the US.
To listen, go to around 14.00 on http://t.co/SIdyBlI Its in Danish. Quotes more precise in meaning than words, admittedly, as I’ve translated them.
“Danish public investment scene is run by old men who don’t understand software. They are used to DOS, Windows and partner channels. They don’t have their finger on the pulse. “
“None of all that money from the government goes into the small startups I know. We simply have a competency problem among public investors”
“It’s very telling that one of the biggest Danish seed investor pride themselves on mostly investing in “patentable technologies”, how many IT successes have come out of that? Barely any, since you can’t patent software.
and my favorite:
“Stop focusing on loosing least money possible. Lets focus on getting most out of the investment, not how to minimize the risk, which seems to be the focus right now”
Thanks to @trendsonlinedk @kaspertidemann. Podcast here: http://t.co/SIdyBlI
Just for the record, one seed investor in Denmark has been very supportive of me. So he is excluded as far as I am concerned:-)
Just did a radio show with Minister for Growth and Commerce in Denmark, Ole Sohn, and two fellow entrepreneurs, Martin Bjerregaard, Rainmaking and Tommy Ahlers, Podio. It was part of De Seks Hatte on 24/7, radio show I am part of.
It has left some pretty big questions in my mind…
To start, here is the Governments plan
1) Map Denmarks positions of strength
2) Develop innovation strategy
3) Analyze innovation system***
Bloody hell! Where’s the action in that? We dont need investigations (trust me there are hundreds already) we need access to capital, lower tax and better access to talent!
Where is the ambition?
Ole Sohn luckily had other thoughts which showed ambition and understanding , but it still leaves you thinking; Nice enough, but hardly ambitious enough?
We need to step up, create a new kind of society. We need radical visionary action. This did not seem to be on the board whatsoever. Israel is a great example of a small nation who’re punching way above their weight. Denmark need to try to get there, not to do 10% better than last year.
This isn’t about cold capitalism. Its about being able to support our welfare system in the future. Everyone benefits from this growth.
Right now, we suck
Sorry to be the one to say this, but telling ourselves we’re great, is not conducive for change. Here are some fact.
- Denmark has the second lowest entrepreneurial activity of any country in the developed world*. Only Slovenia sucks more.
- We have the 2nd lowest job creation growth expectation of the entire developed world. Only Japan sucks more, and they just had a nuclear disaster!**
Step one, Stop peeing in our pants to keep warm
Lets stop making such short term rules, for example.
- The startup tax (iværksætterskatten) only brings in 150million kroner but it costs estimated 4 billion kr in loss of angel investment. That’s plain stupid.
- New suggestion to reduce size of loss that can be transferred to next tax year will bring in some peanuts in. But move hundreds of the most promising bio tech and cleantech out of the country. Sweden is 25 minutes by car, you dont even have to change staff!
- The new growth loans (which are a good idea) charges the startup 12% interest. So for couple of hundred thousand in, we make sure less startups take the loans and loose millions in new jobs and company taxes. A random example of the hundreds of rules made by small-minded thinking.
Ole Sohn promised they will remove the hated startup tax but not now. Why not? How hard can it be? He talks about why in the radio show.
And btw he was quite a nice guy.
Show will air Saturday 16th at 11.15 I believe on radio 24/7. Fb page
@ahlers. Tommy Ahlers
@bjergegaard. Martin Bjergegaard
*GEM report 2011, measured Total Entrepreneurial Activity. **GEM report 2011. Growth Expectations
*** As per regeringsgrundlaget okt2011. Regeringens egne ord, på dansk: “Kortlægge styrkepositioner”, “Udvikle innovationsstrategi”, ”Analysere innovationsordninger”
Hvad Venture branchen efterspørger. DVCA’s vækstforslag
Regeringens håbløse investeringspolitik, Toke Kruse, iværksætter
Ole Sohn første store tale om hans plan for iværksætteri
Iværksætter politikken er blevet en byrde. IDA (ingenør foreningen)
The EU has discovered social media. Or, fast moving as always, they’ve heard about it. So they are conducting an investigation “into its benefits in order to catalyse the take-up of social networking by European organisations.
I just got invited to come down as a part of a massive panel explaining them how social media works (could I suggest reading on the internet as a slightly cheaper option?) Cutely, they’ve come up for their own abbreviation, SNS - social network services, perhaps a little late for mass uptake.
The friendly email:
“As part of project by the European Commission on the benefits to organisations of social networking services (SNS), we will be hosting a workshop on 20 March 2012 in Brussels. The aim is to bring together a group of people with a thorough knowledge of SNS and with an interest in discussing their benefits to organisations. We are aiming to attract web entrepreneurs, business consultants, academics, people from social networking sites, and people from organisations that have managed to successfully use SNS to their benefit.
The project as a whole aims to establish a core understanding – and subsequent policy options – to catalyse the take-up of social networking by European organisations. The results would directly feed into the “Digital Agenda Assembly”, the main annual event charting progress in the implementation of the EU’s Digital Agenda, in June 2012.
The purpose of this email is to informally gauge your interest and availablity to participate in the event (travel expenses within Europe would be covered by the European Commission).
So welcome EU, we call this the i-n-t-e-r-n-e-t
Why can entrepreneurs achieve big results with little ressources? And why can they do stuff faster than much larger companies?
It’s because entrepreneurs think differently…
Big corps and business school teach us to achieve success by setting goal. You set the goal. Then you work to achieve it in a linear fashion.
Entrepreneurs think totally different. We think; this is the available ressources and opportunities right now. How can i maximise the outcome of this? So a flexible fashion.
The differences spring from a difference in belief in whether we can control our circumstances or not? A big corp will try to control (patents, massive campaigns). An entrepreneur expects the status quo to continue changing so prefers to innovate their way of problems. They believe control is impossible, as change is the only constant.
THE SCIENCE BEHIND
- Bird in Hand Principle – Start with your means. Don’t wait for the perfect opportunity. Start taking action, based on what you have readily available: who you are, what you know, and who you know.
- Lemonade Principle – Leverage contingencies Embrace surprises that arise from uncertain situations, remaining flexible rather than tethered to existing goals.
As many other liberals and humanists I am sad about the last decade’s growing negativity towards foreigners in my country.
All over Europe right wing parties are voted into parliament, often to fight “foreigners from taking our jobs and benefits”. Here’s some facts which proves exactly the opposite:
Ian Goldwin from Oxford University has researched how much of the American economy is build by migrants. Read it and weep Europe:
- More than half of Silicon Valley Startups are started by migrants.
- Migrants outnumber native-born americans 3 to 1 in Nobel Prize winners and Academy Award winners
- Migrants account for two thirds of the US engineering workforce. And more than 50% of engineering/ science doctorates.
- Inventors of international patent applications from the us are 40% migrant (72% at Qualcomm)
- Google, Intel, PayPal, eBay and Yahoo are started by migrants.
I quote “Short-sighted policies to curtail immigration backfire and lead to slower growth and higher unemployment”
A side note: The state of Denmark:
Totally contrary to this, is how we in treat people here. The principal of Copenhagen University is quoting a survey in a national paper* today saying that 25% of international students in Denmark feel downright ”isolated”
Only 1 in 3 foreign students manage to get a job after graduating from our universities, so we manage to attract the talent, we just show them the door afterwards! So it is the fault of employers not the universities. (come to the startup scene, we hire on merit, not origin)
According to DI** we’re going to be short of 30,000 highly educated workers in 2030.
Quote again, this time from Shakespeare. “There’s something rotten in the state of Denmark”
** Danish industry association
Yesterday one of the organisers of yet another government programme for “accelerating the growth of growth tech startups” came to see me. Thinking that perhaps I could tell him which startups they should select for a new programme for startups.
But here is the thing. They should select none. They should cancel the whole bloody idea. Because it is yet another hopeless initiative that show that the consultants and interns the government hires to create startup programme have zero insight into what startups actually need.
Actually this one was even worse. It wants to “incubate” already funded fast growing tech startups. Oh, and not the whole company, just the founders which it would remove from the rest of the team for months. But here it is, unless you successfully (and that does NOT mean having run a small consultancy company) have run, grown and preferably sold a tech startup yourself you dont know anything about how to do that!
It is plainly insulting that they think that founders are so stupid they could benefit from incubating from a couple of interns, some old-school corporate managers and consultants. I mean, if these people are that good at it, why dont they start tech startups themselves?
Sorry for the rant, but I am sick of programmes being designed for the consultants to be able to collect a pay check and fit into political agendas, rather than trying to solve problems startups actually have (believe me, there is lots of stuff we would LOVE help with - start by looking at everything admin).
If you’re not going to do anything good with this tax money, then lets put it into healthcare or looking after the elderly or something like that. It certainly does nothing to help generate growth via startups.
Let’s get serious here.
Here in Zambia it evident how some of the well meaning aid from the western world end up doing more harm than good.
On my first few days in Lusaka I was actually pleased with the amount of street vendors selling used clothing, obviously donated second hand clothing collected in the western world and sent here. Thinking it was nice it actually got here, and that the people selling it could make a living doing so. Until today Tue Andersen, the Zambian resident Danish entrepreneur we’re visiting, told me that it had totally destroyed the local clothing manufacturing industry. It goes without saying that local suppliers cannot pay staff and buy raw materials and then compete with free donations.
Perhaps the worst aspect of this, is that lots of manufacturing happened in the remote regions, so the income that is being generated has moved from smaller towns to the capital. The non-capital areas are already being depopulated due to lack of opportunity (causing the cities to swell to unsustainable sizes lacking sufficient opportunity). The people selling the clothes obviously make a living from it, but this is just a few people, compared to a whole industry.
Anyway, I thought we’d learnt this lesson after EU surplus food severely damaged the vegetable growing industry in Northern Africa?
PS: And dont argue it’s the only way to help. I am here because we’ve set up a competition for entrepreneurs, where they can win startup capital for economically sustainable companies that can generate growth, including jobs. We doing it together with Kukula Capital, a venture fund here started by same Tue Andersen. Setting up knowledge intensive businesses such as a VC here makes great business sense because the market is desperate for capital. And it employs local people in well paid professional jobs (which there are few of), plus helps local business people overcome one of the biggest hurdles to growth, namely finance. So we can buy people a fishing rod instead of a fish.
“Beauty is a gift. Intelligence is an investment. Wealth is a result. Humility is an achievement”.
Recently Lars Hindrics of HackFwd, posted this quote on twitter. It made me think of how humility is the undervalued quality of successful business-builders.
The most really successful people are laid back and easy going. (not least visible in Silicon Valley where billionaires dress like colleague students and you can strike up a conversation with a 2.0 rockstar in any given bar - often unknowingly). Successful people don’t have to demonstrate it all the time.
- Humility mostly comes *after* success. (Lars, for example, founded and later IPO’ed the social network Xing (sometimes called “the German LinkedIn”) as the first 2.0 company to go public in Europe). People still fighting to become successful help no one. And they never have time. Pride surfacing as arrogance?
Arrogance is when you still don’t know what you don’t know
I have a pocket theory that humility / arrogance comes in circles. As you move cyclically between starting something new to feeling you master the discipline. However, you never truly master the discipline, and every time you realise this you regain humility.
Most people start humble, but turn arrogant
It starts early. I speak to entrepreneurs in the early stage of the process all the time. At this stage people are driven, focused and humble. When they then have their first experience of things going well they often turn into arrogant little know-betters. They now believe they now master the game. (Later they will gain enough insight to realize that what they know is only the tip of the iceberg. At this stage founders regain humility, thank God!)
The smart kid figures it out
Unless you’re a complete idiot, these circles of arrogance should stop after a few rounds. By then you should be able to conclude that you are not smarter than everyone else, and that being a nice guy, helping others as you help yourself, is the most sustainable way of growing a company and as a person.
The most interesting this is, that it looks like humility makes you successful faster! (Because people want to help you succeed?) Re Jim Collins “Good to Great” where he proves that companies with humble CEOs (who do what’s best for the company, not what makes themselves famous) are consistently more profitable. Re Tony Hsieh, who built Zappos into one of the most successful e-tailers by building a culture of happiness and helpfulness. So it seems, that karma is also applicable to business.
Some of the good karma startup people out there
Lars Hindrics @LarsHindrics,
Rebeca Hwang, CEO of YouNoodle who helps people every day
Michael Clausen @michaelclausen of Sortedam Ventures who spreads happiness
Rasmus Viemose of Contentcube @rasmusviemose who makes people smile,
Natasha Friis Saxberg @nfsaxberg and Paula Martila @paulamarttila who share