The Secret Sauce of Swedish Start-Ups

Why after Silicon Valley comes… Stockholm

Photo by Stephen Leonardi on Unsplash

5 Reasons Why Sweden Is Such a Start-up Mecca

Having worked as a marketing specialist in the Swedish B2B SaaS space for quite a few years now, I’ve observed a number of things that I believe make up at least parts of this equation.

Flat Hierarchies

Flat hierarchies are a cultural trait commonly cited as a perk of working in Sweden. With few or no levels of management creating distance between team and executives, this structure reflects the general egalitarian culture in Sweden. From a start-up perspective, it’s most probably favorable, as the advantages include more empowered, self-driven employees and quicker decision making.

Stockholm, the capital of Sweden, has bred more tech unicorns per capita than any other region in the world save for Silicon Valley. Photo by Jon Flobrant on Unsplash

Social Security and Accessible Education

This one is interesting. Some economic theories suggest that the dynamics of a high-tax and high-spend welfare state like Sweden are not very favorable to entrepreneurship. Studies have found that the higher government spends per capita, the lower the number of start-ups per worker. The hypothesis would then be that high taxes reduce the entrepreneurs’ incentive in terms of potential gains.

Not too much bureaucracy

Ask any Swede, and they will probably disagree with this one since Swedes, like everyone else, love to curse the tax system and governmental regulations surrounding business. But you only have to try and register a company in Germany or apply to University in France to quickly understand how smooth and comparatively digital most processes are in Sweden.

Spotify is just one example of a Swedish-bred unicorn. Photo by Fixelgraphy on Unsplash

A high level of digitalization

As one of the world’s most cashless societies, combined with a tech-savvy population, Sweden has provided a platform for Fintech and new payment methods to flourish.

The flywheel effect

Success is infectious. When one company sees great progress, it shows others what’s possible. This then becomes a positive spiral, where start-ups and founders are inspired by and learn from each other. Or, as Cameron McLain, co-founder of Giant Ventures in London, describes it:

Take-aways

One of the things I find really interesting about the start-up success in Sweden is the contrasting nature of Stockholm and Sweden on the one hand and the U.S. and Silicon Valley on the other. Sweden’s success challenges many preconceived notions about what type of systems and cultures actually help drive innovation and growth. It proves that a dynamic innovation economy can happily coexist with relatively high taxes and an extensive safety net. There is even evidence to suggest that these factors have a causal effect in the success equation.

Helping B2B & SaaS companies grow through strategic content marketing. Head of Marketing at www.eletive.com | Founder of www.contechi.com

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store