The future of startup ecosystems as impact creators for the society - Sten-Kristian Saluveer
To think about a general journey of different participants in a startup ecosystem, we all have big dreams. If you’re a founder, of course, you want to change things, you want to build the next big thing, and you want to be the next unicorn. Many of you are here because you want to raise a lot of money to make things happen.
If you’re a VC, you want to discover and back up the next unicorn, and you want to build a high-performance portfolio for yourself. And of course, you want to make a lot of money- otherwise, you wouldn’t be in this business.
And if you’re a country, an ecosystem, an organization, an accelerator, a ministry or a university, you want to be the sprouting ground for the next superheroes. You want to be the next big thing worldwide. In terms of an ecosystem, and in terms of power, you want to be recognized. You want to be the number one startup country in the world.
So, how do we get there? We all have our dreams! Let’s start from the perspective of how we think we get there. The usual myth around the next unicorn begins like this: In a small city called Tartu, there was an amazing founder, he had an idea, and he became a superhero. He invented this magical tech, he received a massive VC backing, there was an exponential growth through the world, and he ended up being a unicorn.
In reality, last year in Europe, in the whole startup ecosystem, there were 34 billion euros invested, which is quite a lot of money.
Although the exit potential in Europe is growing, last year there was 103 billion euros worth of unrealized exits. Getting to the unicorn country for a single founder is extremely difficult. And as we all know, 90% of startups usually fail. The journey of becoming the next unicorn is not simplified, and it has a lot of hidden costs. Quite often founders and ecosystems think about in value expectations. When you do make it to the exit, there are a lot of stake owners, who want their money back.
So how much money does the founder actually get? What are the perks? We rarely talk about the personal impact of being a founder. It has an impact on your family, your health and your well-being. We tend to think of it as a magical process, but there is a great cost.
In the last 6 months, as a member of the Startup Estonia strategic team, I started thinking thoroughly about what will bring the next 10-15 years for Estonia. We already have an amazing ecosystem. Last week the Estonian Startup database was acknowledged and I started talking to different entrepreneurs and ecosystem builders all over the world. We started to think about, how to build a successful ecosystem.
The startup ecosystem is not all about founders and VC’s, it’s about the educational system, well-being, public sector, research, development and also media. All of these elements contribute to the success of a founder. If you think about the fact, that most successful startups tend to come out of Silicon Valley, it is actually not the only way forward. We have to realize that one size does not fit all.
There can be many interesting forms that ecosystems can take. For example, Silicon Valley is about the mission, „Anybody could make it“. There are great founders, a lot of capital, a lot of resources, but they also have almost 40 years of tradition, which we can’t replicate in Estonia. And in Israel, they have a saying that, „You can rest when you’re dead“, and most founders there are following that. When you think about France, then their ecosystem is promoting only the TOP 40. There are other ecosystems, which are also very successful, for example, New Zealand's startup ecosystem revolves around talent.
So, what do ecosystems really do? They enable innovation, they help to hatch the new founders through educational and support programs, they help to mediate the relationships between VC’s, government, media and everybody else in the ecosystem.
So, in practical terms, the ecosystem sets the stage to force the founders and promote education. It helps to bring in talent from overseas, mediate the vision and expectations and gives us global visibility.
So, how do you build a successful ecosystem? People we talked to emphasized the three key things:
1. We all need an economic vision, it’s our joint vision
2. We all have to participate, it’s our joint effort
3. We have to learn to trust
But what about the Estonias ecosystem? In the next few months, the new startup Estonia strategy will be coming out, and it’s quite ambitious because we need to look where we are right now, and what we need to achieve in the future. I’d like to give a sneak peek of the strategy:
1. Supporting a globally recognized and sustainable ecosystem
2. Boosting scaleups, research, and development
3. Enabling diversity at gender, age, location
4. Launching relevant KPIs
The future of great ecosystems will not be only about financial success. It’s moving from cash to collaboration, it’s about the long-term impact, not only for the founders but for the whole society. It’s about the dialog between you, as a community, and organizations, like us. We should be proud, happy, and based on that, ready to innovate and conquer the world. So, the bright future is all about our joint effort.
Sten-Kristian Saluveer is a member of the Startup Estonia 2.0 Strategy Team.
Day is organized by the University of Tartu, Tartu city, .Contriber, Tartu
Science Park, Tartu Centre of Creative Industries, Tartu Biotechnology Park,
Tartu Business Advisory Services, Ole Rohkem, and Swedbank. Altogether it took
a team of 200 people to organize sTARTUp Day.
sTARTUp Day is sponsored by the European Regional Development Fund, Enterprise Estonia (EAS), Visit Estonia and Startup Estonia.