Opportunity in times of crisis for Nordic tech startups
May 11 2020
Nordic tech startups face some major challenges during the Covid-19 pandemic, but this could be the making of some of them.
Successful entrepreneurs and business leaders in the Nordic tech space are urging a new crop of startups to do what they did in the past – turn a crisis into an opportunity.
Amid the Covid-19 coronavirus pandemic, there may be a fear among many startups that now is not the time to put their ideas into action, but to put existing businesses into safeguarding mode.
But three of the Nordics’ most successful tech startup founders believe that with enough planning, motivation, support and market understanding, there are actually few better times to seize an opportunity than during a crisis.
Mentimeter’s interactive presentation and meeting proposition is a prime example of adapting to the needs of a crisis climate – facilitating organisations around the world with a virtual communication platform in the new era of remote working.
However, much of the company’s success in helping businesses negotiate the current challenge derives from its own experience with crisis, according to CEO and co-founder Johnny Warström.
“In our first year of running Mentimeter, we found ourselves in a situation where half of our team resigned,” he said. “As a young and relatively inexperienced CEO and founder at the time, it is fair to say that my confidence took a blow and we were all forced to take a step back for some self-reflection.
“It hurt to learn the hard way, of course, but this crisis marked the true start of the company we are running today. In 2015, we rebooted our organisation completely to rectify what we had failed to do at the start. And over the past five years, we have grown our amazing team to almost 100 employees, with only two people leaving during this time.”
Warström attributes the 2014 challenge to a lack of internal communication, which he believes is critical for entrepreneurs to navigate difficult times.
And in a twist of fate, being able to acknowledge this early shortcoming has now led to a situation in which Mentimeter is helping companies through their own crisis.
“We are now experiencing record levels of new registrations,” said Warström. “As people are learning how to efficiently conduct meetings remotely using videoconferencing, they are realising that the need for inclusivity, engagement and data-driven insights doesn’t go away just because they suddenly find themselves working from home. If anything, this becomes even more important.
“We are making it possible for leaders to listen to their teams and make sure every voice is heard – the same idea of efficient communication that we learned the hard way in 2014.”
Konrad Bergström is a Swedish entrepreneur who had to learn an even harder lesson from the 2008 financial crisis when he watched a seemingly thriving distribution business that he had created in the 1990s descend into €500,000 of business and personal debt.
From being a “startup icon”, Bergström spent a short period sleeping in his car following the crash of his business, before attempting to rebuild his confidence and finances in the build-up to his next venture, Zound Industries, which he was to turn into one of Sweden’s fastest-growing companies of all time; and later, the 2016 unveiling of X Shore – an innovation-led manufacturer of fully electric boats.
“I first had the idea for X-Shore back in 1996, but my vision then was ahead of its time, with the requisite technology not yet available,” said Bergström. “After the collapse of my distribution company, I regained my motivation and my passion for entrepreneurship and innovation.”
Bergström’s route to recovery demonstrates a host of characteristics and traits that he has refined with brutal hindsight, which he believes are vital for entrepreneurs to safeguard their businesses.
“For me, the key to overcoming this crisis was determination and having great people around me,” he said. “Starting a business is a one-way street – once you throw the dice, you are in the game. Going through professional crises has developed my ability to think ahead before taking that plunge.
“I recommend any entrepreneur to make a really detailed plan from the start. Just having a plan B won’t do – you will need a plan A, B, C and D to succeed.”
Leveraging a crisis
Perseverance, a sense of timing, and deep planning and research were also high on Bergström’s list of advice, top-trumped by “remaining attentive enough to identify the next technological shift, and acting on it”.
This latter trait perfectly characterises the rise of Meniga, an Icelandic fintech company born out of the 2008 financial crisis, rather than destroyed by it.
“I actually had the idea of starting my own personal finance management company long before the financial crash in 2008,” said Meniga’s CEO and co-founder, Georg Ludviksson. “However, when the financial crash eventually hit, the environment suddenly became much more favourable for this idea to flourish.
“As people were losing their income, worrying about their savings and experiencing a substantial drop in purchasing power, these were of course really challenging times, but it also created a desperate need for someone to help with their finances.”
Much like Mentimeter is doing now, Meniga, which has grown to become a world leader in digital banking solutions, leapt on an opportunity in 2008 to turn the crisis into an opportunity on a personal level, and a safety net for many organisations in seek of partnership and help.
“Overcoming a crisis requires you to identify key opportunities and reposition your offering fast, in order to make yourself relevant to the current environment,” said Ludviksson. “I have been an entrepreneur for more than 20 years and have personally experienced three different crises in my professional life – the burst of the dotcom bubble in the early 2000s, the financial crash of 2008 and this current pandemic.
“Experiencing these tougher times has made me more cautious in the sense that I always try to be as prepared as possible, balancing this with a more instinctive ambition to take risks and to have an aggressive business strategy.”
Opportunity as a by-product of crisis
Such a balance is key in order to truly weigh up whether the timing is right to start or adapt a company.
However, Ludviksson believes there is no better time to test the credentials of an entrepreneur than in times of crisis.
“You are highly likely to find yourself in unfamiliar situations at some point, and this might force you to try out new things,” he said. “Embrace this, and if what you’re doing isn’t working, don’t be scared to try something else.”
Warström agreed that if the current situation teaches business leaders anything, it will be the significance of building a business that is already resilient and adaptable to crisis, even in more lucrative times. And most of all, building something that is relevant regardless of the climate.
“Being attentive to the situation and your organisation is the most important advice I can give for overcoming a crisis,” he said. “A great idea is never great before it starts providing value for people other than yourself, and this is exacerbated in times of crisis. Before you get down to business, start by really understanding what is needed, and by whom.”
Having been foiled by the last major crisis himself, Bergström concluded by emphasising how opportunity is not just made through a crisis; rather, it is an actual by-product of crisis.
“The three largest companies I’ve built were all started during times of economic turmoil and there is much to be gained from both crashes and booms,” he said. “I think it’s every entrepreneur's responsibility to help solve society’s problems as best they can and, in the wake of this pandemic, there will be an even greater need for sustainable innovation and tech.
“I would recommend any aspiring entrepreneur to use this time of isolation to get creative and start planning for their next big idea.”