After Silicon Valley, Stockholm produces highest number of “unicorns” per capita

http://www.forbes.com/sites/knowledgewharton/2015/11/11/how-stockholm-became-a-unicorn-factory/

by adventured • 11 years ago

112 55 11 years ago

jamesblonde2• 11 years ago

Stockholm resident here. We have a nice combination of being seriously trendy and having a deep engineering culture. Many of our unicorns (Spotify, Klarna, King) embody this in their DNA. Easy to get good UI people here, which is unusual.

johansch2• 11 years ago

Certainly lots of hipsters in Stockholm, that is true. :) If they are able to build good UX though, that's something completely different.

// Linköpings-lantis

vasilipupkin• 11 years ago

I do have to say, having visited Stockholm recently, it does have the vibe of simultaneously seeming cool/trendy and yet relaxed, which I think helps startups spring up

uptown• 11 years ago

These startups spend heavily on user acquisition, and find those users never want to leave.

sombremesa• 11 years ago

Good one

api• 11 years ago

This provides circumstantial evidence to support something I've thought for a long time: that America's lead in entrepreneurship is more cultural than it is a product of economic right-leaning / supply side policies. Sweden is significantly more "socialistic" than anything in the USA.

Perhaps even more significantly most of the USA is nowhere near as entrepreneurial as places like SF, LA, and NYC, despite many places having lower taxes and less regulation. There's lots of states that are more business friendly than California that have far less entrepreneurship.

Taken together these two things argue strongly against the "entrepreneurship comes from having small government" right-wing thesis. Don't get me wrong-- too much government meddling can sink business. But this argues strongly against the hard-line rhetoric that we often hear.

Edit: It does not however support the inverse thesis -- that more government is better. I personally think it is mostly cultural and all government has to do is not bork things too badly and keep the lights on and the barbarians out.

pcrh2• 11 years ago

The culture of the Bay Area is also much more "left-leaning" than that of much of the US. The Bay Area likely helps creativity and innovation in other ways as well, as it has a ingrained culture that favors outsiders and diversity (e.g. diverse ethnic and gay cultures), reducing the barrier for other kinds of "outside" thinking.

This would support your thesis. However the US is also more entrepreneurial in other areas as well and its large government budget as well as domestic market helps indigenous large manufacturing (e.g. aerospace) in a way that few other countries can match.

seivan2• 11 years ago

You'd be surprised how left-leaning isn't associated with "outside" thinking in Sweden but with hive-mind.

Or you know.. in any historically communist country.

sheraz5• 11 years ago

I think it is purely cultural. However, I do not believe that political leanings have much to do with it. Take Texas for example.

Houston is the energy capital of the world -- and it is quite conservative in comparison to California.

Though we don't see it discussed here on HN that often, but Texas is home to a lot of innovation, both in Energy, Petroleum, and Medical.

bogomipz2• 11 years ago

The overwhelming majority of tech in Texas is centered in Austin, a very liberal thinking island in the middle of Texas. So culturally yes.

lukasm• 11 years ago

Culture is very important, but keep in mind that USA is the biggest market without massive barriers like in EU (language, regulations etc). Look at B2B.

In the end the equation may consist of: culture, weather, big markets, limited regulation (non-compete not enforceable), free enterprise, proximity to certain institutions (Bell labs, NASA, Stanford), rich people (angel investors), hackers

oldmanjay• 11 years ago

Considering that human ability is normally distributed, and the easy migration enabled by modern technology has resulted in a massive concentration of intelligence in the major cities of the US, it's exactly as expected that there would be certain regions that stand out above the rest. I don't think this really provides evidence for or against any political philosophy, provided there are relatively reasonable amounts of liberty in the system.

enjo• 11 years ago

I've heard it surmised that the biggest advantage the United States has in terms of entrepreneurship is our incredibly lax bankruptcy laws. It's easy to start a company, fail, and maintain the ability to do it again. This is partly cultural (we don't look down on failure very much) but also is structural (failing doesn't ruin you for life). That isn't true of many countries.

bogomipz2• 11 years ago

I don't think anybody thinks "I will start a business because I have favorable bankruptcy laws." I'm not even sure what you mean by favorable. an LLC or an S Corp is a business entity designed to limit the risk exposure of an individual if they form one. And yes there are provisions in the law to allow you to restructure - namely because it allows your creditors a chance to get paid but there's nothing "lax" about that.

Entrepreneurship is definitely culturally engrained in the US. Starting a business although risky is generally lauded. I think Entrepreneurship is a very accessible concept to most Americans - most people in the US know someone that has started their own business.

fefifofu• 11 years ago

Also surmising here, I would assume a more socialist country would be more fail-friendly. More support available if I hit rock bottom. I'm from Canada and not being able to afford health insurance for my family sounds terrifying.

cylinder2• 11 years ago

The biggest advantage is just the huge market and tremendous amount of capital the country has flowing around. Reserve currency status imports even more capital (to our detriment). I think Americans who haven't analyzed other nations don't realize how different the capital availability is here vs abroad, from real estate to corporates to startups. This is why the economy basically froze when the credit markets seized.

The large market drives the entrepreneurial culture, because the stakes are so big if you "make it" here, and market sizes for even the most niche things become viable for an entrepreneur to chase with investors in tow. Not so in smaller markets.

Most success is in spite of our poor government, inefficient land use, and entrenched inequality. Chapter 11 is fascinating, I studied it extensively in school. I would not say it drives entrepreneurship but rather large corporate risk taking maybe. Startups aren't thinking about restructuring options. Besides, startup investors are after equity, not debt; Chapter 11 is about reorganizing debt, with secured debt the higher priority, at the expense of equity holders.

sheraz5• 11 years ago

Title is misleading. Please add "per capita" !!!

Stockholm is so over-hyped. Yes, there is a lot of engineering culture, but there is so little risk capital available at the bottom is it truly laughable.

Furthermore, I don't see many of these unicorns putting a lot back into the ecosystem in terms of investment, social capital, or outreach.

Sweden's needs her of "Paypal mafia [1], Facebook Mafia [2], Trilogy Mafia, and Dellionaires [3] if this startup startup ecosystem is to really thrive.

[1] https://en.wikipedia.org/wiki/PayPal_Mafia

[2] https://www.cbinsights.com/blog/facebook-mafia/

[3] http://www.barrypopik.com/index.php/new_york_city/entry/dell...

(edit) so more thoughts

gozo8• 11 years ago

little risk capital available at the bottom

Compared to where? The days where you get funding based on an idea is over. I don't think the funding situation is particularly bad "per capita" [0]. There are other problems with Stockholm of course, but that's another story.

[0] http://blogs.wsj.com/tech-europe/2013/11/11/how-entrepreneur...

sheraz5• 11 years ago

Compared to London, NYC, LA, SF, Austin, Berlin to start.

Secondly, I have issues with the whole "per capita" comparison. It is an important and often over-looked detail when looking at these ecosystems.

ThomPete2• 11 years ago

It is very bad.

You really just have to try and raise money there to realize how bad. Most of Scandinavia are still in many ways caught in the idea of loans rather than risky investments.

And most investors in Europe are very risk averse.

pbreit• 11 years ago

Niklas Zennstrom could probably be put in that company.

https://en.wikipedia.org/wiki/Atomico

sheraz5• 11 years ago

But he is not.

Not only is he largely based in London, he is not making seed stage investments [1]. The Atomico website does not list Stockholm as a city where they have an office. Very telling...

[1] - "Niklas Zennström’s Atomico leaves early-stage focus behind with new $476m fund" - http://venturevillage.eu/atomico-476m-fund -

ThomPete2• 11 years ago

Exactly. It's more of an analogy than based on any specific access to talent. There is great design talent in Scandinavia but thats just not enough to build a company.

gozo8• 11 years ago

Except if you look at the successes they are as based on engineering and business talent as much as design. Spotify, p2p + licensing deals. Klarna, Erlang + credit checks. King, game development + gamification.

dvdplm2• 11 years ago

After having spent almost a year here I have to say that it's striking to me how much old-school tech I meet here. Ppl just starting to dip into cloud, Go/Rust hardly heard of and Rails+jQuery still perceived as the "new" thing. That said, good ideas and an entrepreneurial culture can flourish on oldish tech and there's no need to obsess over the latest, I just felt the difference compared to the us west coast was striking when i came here.

ersii2• 11 years ago

Could you elaborate more on what you mean by "old school tech"?

To add some counter-anecdata to yours, I find there's plenty of Rails/jQuery/Go/Rust/Cloud people here in Sweden/Stockholm and that there's quite many using cloud services and what not. I find it a bit hard to digest that any of those languages or techniques are perceived as "new" here. Perhaps by some, but then that would apply at any place around the globe to some extent.

jamesblonde2• 11 years ago

You'll find that it's a bit different here. There's loads of Erlang here - not unusual, considering it was invented here. Loads of C, C++ - not unusual, considering Ericsson and its ecosystem.

dvdplm2• 11 years ago

old school tech: greenfield waterfall Java projects, very little dev-ops, big-iron databases (Oracle, SQLServer and IBM).

This is all anecdotal evidence from having lived in the city for not even a full year, so not saying I know something. It just seems like friends and acquaintances seem less inclined to try out the new stuff than in the US.

Sweden in general is weird though: there's like this stark difference between a smaller group of very competent people and a herd that seems to be pretty much stuck in its ways. The difference between the best and the mainline is greater than in other places. (or so it seems to me)

gozo8• 11 years ago

Uhm, no [0]. It all depends where you work though. The web industry is more of a separate phenomenon than in the bay area.

[0] https://twitter.com/rob_pike/status/346637405668925440 [0] https://github.com/search?utf8=%E2%9C%93&q=language%3AGo+loc... [0] http://www.meetup.com/sthlmrb/ [0] etc.

johansch2• 11 years ago

There's not that much cutting art "web tech" here. In other areas though, there's loads of innovative tech here.

collyw• 11 years ago

Maybe tried and tested works. Many new ideas are just rehashes of stuff fom years ago.

acccret8• 11 years ago

Stockholm suffers from extreme housing shortage. I live here now but in a student flat I got after 3 years of queue time, and moving in a couple of month. Not worth it and I think this will limit the number of startups in the future.

Someone said something about old-school tech and it is true, I rarely meet anyone who is on the edge on new technology. I find myself always explaining what something is, but regardless of tech there are some talented people here.

There is also some serious tax problems, long over 50% in tax. People think they only pay around 23% in tax since the government splits up the tax in two parts, one for the company (around 32%) and one for the employee but money that would have been yours. Then you have tax on items and for example gas tax. Everything is very subtle and perhaps why they get away with it.

hueving• 11 years ago

, one for the company (around 32%) and one for the employee but money that would have been yours.

This is similar in the US. There are lots of additional costs beyond the salary for an employee. It's just never really advertised to the employee how much money the company actually puts up to pay the salary in your offer letter.

platz• 11 years ago

money that would have been yours

Yep, employers aren't realy interested in profits

cylinder2• 11 years ago

Yes, employer side of payroll taxes and other costs, along with the gigantic health insurance costs (employer side). These should be eliminated, let the compensation flow to employees and then tax it in land values or consumption taxes, ideally. Then people can get an idea of just how much tax they are paying, and maybe Americans will stop thinking they're getting such a great deal.

That said, it's still pretty remarkable how high US salaries are even with all these costs.

ilyanep• 11 years ago

Stockholm suffers from extreme housing shortage.

Is that much worse than Silicon Valley (legitimately curious, I've never looked into the housing situation in Stockholm)? 1brs go for nearly $3k (if not more) in many of the more populated parts of the peninsula and SF.

Swizec• 11 years ago

A 1-bedroom for $3k inside SF is a steal.

Median rent for a 1-bedroom in SF hit $3600 in October -> http://sf.curbed.com/archives/2015/10/09/the_median_rent_for...

BurningFrog• 11 years ago

Rents aren't that bad. But you have to wait for 1-2 decades to get an apartment, due to the special Swedish brand of rent control.

So you have to buy. Which is very expensive. Not sure how it compares to SF very expensive.

ountacc• 11 years ago

You also have to compare the cities, let us say they are on equal terms in housing shortage.

Stockholm is piss dark and cold 8 month a year, in Silicon Valley not so much right? All the big boys are in SV and you earn more and pay less in taxes. You also get other perks from living in the USA.

So you are a talented guy, Stockholm or SV? The choice is obvious, SV. So I don't see the point in trying to fight for a place to stay in Stockholm when you can go somewhere else better.

Not only that, just the last 5 years have done much harm to the housing in Stockholm due to mass immigration and now immigration peaks at 2000 people per day so expect it to get even worse.

seivan2• 11 years ago

Your last part is in the direct contrast to low tax countries.

Not only do you pay tax on both sides of your income. But we have moms on everything. Essentially you pay more than 50% tax.

In Singapore, restaurants will usually show prices excluding tax, forcing you to see the direct impact of tax added on the total sum.

Swedish receipts do contain the amount of tax, but it's never as apparent as they always include the sum into everything you buy - thus normalising the concept and make it easier to melt down and eventually accept.

Sure, it sucks to split bills with an explicit tax added on, but I rather do the math than having the government normalise taking tax. Very few Swedes are aware of how much tax they actually pay when you go beyond your side of the income tax.

40% loan of GDP doesn't mean jack when the GDP includes a housing bubble about to burst.

EDIT: I am not arguing against taxes here, I am just pointing out the differences on how taxes are presented to you.

Nullabillity• 11 years ago

The population figure seems pretty off. In school it's always been 1.5M, and Wikipedia says that it varies between 900k, 1.6M, and 2.2M, depending on what you define as Stockholm.

cgtyoder• 11 years ago

I continue to find it amusing that an imaginary animal is being used to describe a(n increasing) number of things that actually do exist.

chc• 11 years ago

I assume the (joking) origin is that it's something everybody would like to find but nobody really does.

After Silicon Valley, Stockholm produces highest number of “unicorns” per capita

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