Why tiny Stockholm has the most stunning startup ecosystem since Tel Aviv

http://pandodaily.com/2012/11/20/why-tiny-stockholm-has-the-most-stunning-startup-ecosystem-since-tel-aviv/?pages=all

by siavash • 14 years ago

105 97 14 years ago

pandodaily.com

filip013• 14 years ago

FWIW: IAmA founder of a startup in Stockholm (sharing offices with Wrapp), AMA.

hjalle2• 14 years ago

Out of curiosity, what company?

filip013• 14 years ago

Aevy

toyg• 14 years ago

Is it still as freaking expensive as when I was there last time, about 10 years ago ?

filip013• 14 years ago

Yep: http://newsfeed.time.com/2012/01/23/travel-like-the-1-top-10...

Peer2• 14 years ago

The article missed Tobii, which this year got a $20 million investment by Intel, and has raised over $50 million in total. They're making a very cool eye tracking product that you (among other use cases) can use to control a computer with your eyes.

unwind• 14 years ago

But Tobii has been around since 2001, and has 340 employees (both facts from Wikipedia). That's hardly a "startup".

mongol3• 14 years ago

Skype is from 2003. The article mentions Skype, Tobii is about as old.

symmetricsaurus• 14 years ago

1.4 million in the urban area and 2.1 million in the metropolitan area is not exactly tiny.

Tel Aviv is for example smaller, but I guess that the comparison is to the bay area/silicon valley or something like that.

skreech• 14 years ago

Population-wise, San Francisco is also smaller than the city of Stockholm.

But it is a tiny tiny tiny startup ecosystem.

Peer2• 14 years ago

Tel Aviv is probarbly larger than Stockholm though.

The Swedish definition of "metropolitan" area is skewed, it consists of several cities and according to wikipedia its 6,519 km2 that is compared to Tel Avivs metropolian area of 1,516 km2. Still Tel Avivs has a metropolitan population of 3.4 million people compared to Stockholm's 2.1 million.

adsr• 14 years ago

Stockholm is located on a group of islands on the other hand which impacts the surface area.

ttrt• 14 years ago

6.5k km2 is actually more than 1/4 of Israel's land area (20,770/22,072 km)

dbaupp• 14 years ago

Just for others' reference, the metropolitan area of Stockholm[0] is the whole of the Stockholm county.

Just looking at the map, a slightly better/more conventional measure of Stockholm might be Stockholm municipality[1] + Huddinge, Sundbyberg and Solna, which gives an area of 350 km2 and a population of about 1.1 million.

[0] https://en.wikipedia.org/wiki/List_of_metropolitan_areas_in_... [1]: https://en.wikipedia.org/wiki/Stockholm_Municipality

flexie2• 14 years ago

Also, the Stockholm startup scene mainly attracts talent among the 9.5 million Swedes, whereas Tel Aviv benefits from immigration from Russia (http://www.bbc.co.uk/news/business-15797257).

San Francisco attracts talent from all over the US, or rather from all over the world.

SeanLuke• 14 years ago

Stockholm has the same metro area size as teeny tiny Baltimore. :-)

mbesto4• 14 years ago

I love Stockholm. It's an awesome city and despite the high taxes, it's very progressive in terms of trends. In other words, there are many early adopters there, which is something that is very unique to SV.

Also, much of Swedish design is built on simplicity. You can see this everywhere from web design, to store design and of course furniture. The only downside, as others have pointed out, is that its extremely expensive.

EDIT: Discrepancies around definitions of conservatism.

mseebach22• 14 years ago

In what ways do you consider Sweden a conservative country? It is very socially liberal and while it's finances are run mostly sanely, it has a huge re-distributive welfare state.

angry-hacker• 14 years ago

Often in many countries conservatives = high taxes, welfare state. Not on the social issues though.

mbesto4• 14 years ago

Conservative in the sense that they are trying to preserve continuity and stability. Probably not the best choice of words on my part. I'll edit it out.

beagle317• 14 years ago

How high are the taxes in Sweden?

Highest bracket in Tel-Aviv is, as far as I know, ~60% (50% income tax + 10% health/social taxes) + 17% VAT (=~sales tax equivalent, essentially applicable to individuals but less so to companies)

Highest bracket in NYC as of 2013 (unless the "fiscal cliff" is averted) is a few % short of 60% (40% federal, 13% state, 2% fica, 2% social security, and a few more). If the fiscal cliff is averted, it's still 53% or so. + 8.5% sales tax. (sales tax applies everywhere)

Also, what do you get for these taxes?

In Israel, you get comprehensive universal healthcare (services paid by tax, drugs and medicines subsidized by tax), comprehensive public education - no tuition for high school, $3000/year tuition for public universities, $6000/year for private universities or colleges. (All Israeli universities are world class; most colleges aren't). You also get reasonable social security payments when you retire, and reasonable unemployment for 6 months or so after getting laid off (and unreasonable barely-but-enough-to-not-starve unemployment later). And also mandatory conscription when you reach 18, and the occasional bus bombing.

In NYC, you'll get free public schools (some of which are excellent and some of which are glorified babysitting institutions), and other than that ... mostly nothing. You're supposed to get social security payments when you retire, but the books don't balance (unlike the Israeli pension fund books, which do). You also get the occasional hurricane (but only one in the last 100 years had really been devastating - two in the last 106 years)

stuaxo• 14 years ago

Hm; might be unreasonable - but I'd worry about the security situation in Israel. In the US, not much of a safety net; I'd guess in stockholm things are alright for the taxes you pay.

mdemare• 14 years ago

When social security will pay out more than comes in, the difference will come out of general tax revenue. There are no books to balance. The retirement age may go up, but reducing or eliminating social security is electoral suicide.

mbesto4• 14 years ago

I don't know a single person in NYC who actually pays at a 60% tax rate. Yes, the city and state taxes are very high (and is on par with other countries). But, anyone in that tax bracket has and will pay for an accountant to shed a lot more off of that. So the effective tax rate is much less.

Swedish income taxes are extreme and have a very high VAT as well (25%): http://en.wikipedia.org/wiki/Taxation_in_Sweden

luuse4• 14 years ago

They differ all over sweden depending on how old you are, how long you've been working for and how much you earn.

In Stockholm you pay about 30% in income tax (add 20% if you earn more than 401 100 SEK annually, you earn about 360 000 SEK annually as a newly graduated MS CS student). However you also have another tax, the employment tax, which isn't displayed on your salary specification and is paid by your employer in addition to your salary. The employment tax is 31%. This makes the effective income tax about 81%...

The sales tax is 25% for most things.

We do have free public education, and healthcare for everyone under 18 (it's heavily subsidized after 18 but not free). The standard of our universities is not bad but i wouldn't call it world class as they try to make you believe... We do have problems with the earlier education. Stockholm doesn't have any problems with natural disasters or bombings but the housing situation is pretty crappy.

winter_blue2• 14 years ago

The U.A.E. is a country where you have zero, yep zero taxes. Dubai is a pretty great city to live in, and it's not that expensive. You could live well easily on $1000/month. The only downside to U.A.E. is that the tech scene is barely starting up. So you'd have to find talent abroad. On the bright side, it's fairly easy to get visas both to bring people over and to start your own company.

dschiptsov2• 14 years ago

The trick is that most of population is in rural area..)

btw, anyone form Dalarna are reading HN?)

FrejNorling• 14 years ago

Västmanland.... close enough =)

hjalle2• 14 years ago

Im from Dalarna, currently studying CS in Stockholm though

henrik_w3• 14 years ago

Yay Stockholm!

Another Stockholm start-up that looks interesting is Gavagai http://gavagai.se/

henrik_w3• 14 years ago

And there is CLX Networks (http://www.clxnetworks.com/), on Wired UK's list of hottest 100 European startups (September issue).

And Telepo (http://telepo.se/).

progn2• 14 years ago

Are Swedish startups (or EU startups in general) interested in talented American programmers?

mindjiver2• 14 years ago

Yes, I would say so. The software developer pool in Stockholm is running really dry. So the market is really hot and it has been this way for a few years now.

Here at $MEGA_CORP we did some recruiting recently and we hired from all over Europe. One good(?) thing is that the political situation in Russia is quite crappy at the moment, so there it is possible to recruit top talent from there.

I guess hiring from the across the pond is slightly harder. But if you pass the normal skype/phone/online interviews and you are good it shouldn't be a huge problem to fly you over for an onsite interview.

robk• 14 years ago

Campanja is another rapidly growing startup in Stockholm.

flexie2• 14 years ago

I think the article forgets one reason why Scandinavian countries do well in IT start ups: Allmost all Scandinavians speak English quite well. Given that most new technology and research is communicated in English, a decent level of English is necessary to adapt new technology. This gives Scandinavians and Dutch entrepreneurs an edge compared to most other European entrepreneurs, except obviously the Irish and British entrepreneurs.

zalew2• 14 years ago

> This gives Scandinavians and Dutch entrepreneurs an edge compared to most other European entrepreneurs

how? the world's ranking of english proficiency is dominated by Europeans https://en.wikipedia.org/wiki/EF_English_Proficiency_Index#2... I am pretty sure among the IT branch the scores are much higher although you don't need perfect language skills to understand technical concepts.

lambda• 14 years ago

You do notice that all of the countries listed as "Very High Proficiency" are Scandinavian or Dutch, just like he said, right? And many of the continental European countries, like France, Italy, and Spain are listed at only "Moderate Proficiency."

While you don't need perfect language skills to understand technical concepts, not being at full proficiency can be a barrier. I know that when I help people out on StackOverflow, one of the main barriers to answering some people's questions is that they can't formulate it in English in a way that I can understand. Proficiency is a two-way thing; besides being able to read English, you need to be able to speak and write it well to fully interact with the technical community.

mcpie• 14 years ago

You do need language skills for the marketing :)

_delirium2• 14 years ago

A related factor is that it's very common for even the first iteration of a product to be in English, which means it can start to get international appeal. This is possible partly because even the domestic market is fairly open to English-language products/services, so you don't need to make something in Swedish in order to sell it to Swedish people.

emilsundberg• 14 years ago

It depends on your target audience. We did our app in english and it didn't catch on in Sweden before we translated it to Swedish.

dschiptsov2• 14 years ago

Moreover, trying to study CS in a language other than English leads to lots of misinterpretations and misunderstandings.

English, fluent reading at least, is absolutely must have for a CS person.

There is a huge difference between, say, Indian guys being taught in English and Russian being taught in Russian.)

And, of course, never read any serious books, like TAOCP or SCIP in translation.) Master your English first and then enjoy non-distorted flow of author's thoughts in his own wording.

henrik_w3• 14 years ago

An opposing view, where Stockholm is not in the top 20 startup cities: http://techcrunch.com/2012/11/20/startup-genome-ranks-the-wo...

beagle317• 14 years ago

Every single experience I've had with a swede, (technical, entrepreneur, or otherwise) has been extremely pleasant. It might be selection bias - most of those that I've met were outside sweden at the time I met them - but from spending some time in Lund, I got the impression that it's a national trait, to the point that I have considered moving to sweden for a few years if the stars align properly.

Perhaps we can have a sweded version of NYC in the US? :) That would be ideal.

skarmklart• 14 years ago

Lund native here. If you ever visit again - feel free to hit me up :)

nlh• 14 years ago

I've had the same experience. Though on an interesting note - I had drinks with one recently and told him as much, and he was taken aback by my observation. "Really? I've found them to be quite difficult at times." Maybe there's something cultural about the way they interact with themselves vs outsiders? Or, as you pointed out, maybe it's the ones who leave Sweden regularly :)

lrem2• 14 years ago

Beware of possible problems when relocating. I know an experienced graphic designer who moved there, due to personal reasons, to see her career go to a sudden stop. At some point she forced a HR person from one of the companies ignoring her CV to answer why. It went more or less like that:

- Oh, that's simple, you completely lack experience.

- Have you missed the entries in my CV?

- No, but none of them was in Sweden.

On the other hand, this may be completely irrelevant in startups.

beagle317• 14 years ago

Thanks. This is very interesting; "Stars aligned" means, among other things, that I won't move before I know I have a job.

purplelobster2• 14 years ago

Where did she gain her experience? I don't want to assume anything, but I think experience from some countries are looked more favorable upon, but I could be wrong.

ry0ohki• 14 years ago

>Perhaps we can have a sweded version of NYC in the US?

Minneapolis? The "super nice" midwest basically has it's roots in Sweden.

rodelrod• 14 years ago

Individuals from all nationalities are nice. Especially the ones you meet out of their national cocoon. They're just nice in different ways. It's when you deal with them as groups that the cultural differences start to grate you. And when the group becomes a crowd, they all turn into monstrous beasts with no brains.

paulhauggis• 14 years ago

Startups probably do well.

However, because of taxes, government regulations, and the fact that it's very difficult to fire someone, it's tough to grow past the startup phase.

This is probably why it's not looked at as a great place to start a business by most.

_of• 14 years ago

Some downsides with Stockholm: (1) It is difficult to make friends in Stockholm, because Swedish people are generally very reserved; (2) It is very dark and cold most of the year; and (3) Summer is short.

mindjiver2• 14 years ago

We say that summer in Sweden is the best day of the year!

jusben1369• 14 years ago

I think that's really only two points not three just FYI.

SuperChihuahua• 14 years ago

Conclusion: productivity++

progn2• 14 years ago

It sounds just like Seattle, then: perfection.

_delirium2• 14 years ago

Like Seattle but colder and darker. Example: Seattle in mid-December is typically mid-40s F with sunset around 4:15pm, while Stockholm is typically mid-30s F with sunset around 2:45pm. Also, more snow, but actually slightly less cloudy.

mongol3• 14 years ago

The darkness and the lightness evens out though.

riams• 14 years ago

I've interviewed with Jacob at iZettle. Great guy and team!

Why tiny Stockholm has the most stunning startup ecosystem since Tel Aviv

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