To give a boost to innovative companies, a global startup festival was held for three days this week in Daejeon, some 160 kilometers south of Seoul. Some 300 participants from Korea and abroad attended the event, including startups, investors and government officials from eight countries.
Among the startup supporters was Slush, one of the largest non-profit startup conferences in Finland. Slush has organized conferences in Tokyo, Shanghai and Singapore, and serves as a bridge between startups and investors to nurture venture companies.
During the three-day event, Andreas Saari, CEO of Slush, sat down with Arirang TV for in-depth discussion on how startups, including those in Korea, can prosper on the global stage as well as some challenges they face today.
Thank you Mr. Saari for taking the time to sit with us for this interview. I would like to begin with some questions here.
1. We heard that Slush is actually one of the leading startup conferences held in Finland. Could you briefly tell our viewers a bit more about Slush?
Sure. I think slush is a combination of two stories really, first started by a handful of Finnish entrepreneurs just to gather their friends together and then later taken over by students in 2011. Well, that's when it really started scaling into one of the leading events in Europe.
Today we are at a 2019 event which will have 25-thousand unique visitors including between three and 4-thousand startups about 2-thousand investors some 7,800 journalists.
More than 500 C-level executives from different large corporations. And what it really is a kind of melting pot. So it brings all of these all of these different people together along with academics and students actually. So the Slush, the thing that people usually recognize when they talk about Slush is a two day event in Helsinki. But that's not all of it. That's the crown jewel and still one of the biggest single gatherings and gatherings that we do.
But there's also more other events around the world and other different kinds of concepts and services that we do to entrepreneurs. But ultimately everything that we do has to help entrepreneurs one way or another.
2. As you said, Slush supports start-up companies. What was the reason or motive behind why this conference started?
I think back when Slush first started, it was born out of a need. It wasn't born because a governmental player or any large organization top-down wanted to have something like this but it was rather it was a group of students who realized that Finland had a couple of problems.
First of all we needed to create more jobs if we wanted to pay the social welfare system that exists in Finland because we have an aging population. Like many other countries as well. So we need more jobs. And the most likely place to create more jobs is to create more companies especially fast, internationally growing companies.
But to get there, three problems needed to be fixed. The first being just the overall attitudes in the Finnish society towards entrepreneurship. It wasn't really a popular option back in around 2010 or so. The second thing is that kind of the knowledge that is required for building a company like that or the skills or even the ambition weren't really there. Especially among young people. They didn't have too many examples and role models that had built companies but this has to look up to. But then slowly they started emerging. And finally the third problem, funding and availability of venture capital, wasn't really that great back then. So Slush set out solving all these all these three challenges.
3. Were there any difficulties in nurturing startups? What has been the biggest achievement so far?
Last year we had about 15,000 meetings at that event and kind of what then defines our success is how many companies get funded. How many companies get new clients or new partners. How many companies hire new people. So find new talent and kind of as we have been working on many other people beyond Slush have also been working towards the same goals in Finland and in the Nordic countries and in Europe.
The biggest bottleneck for growing companies right now is actually no longer venture capital, but it is more often even just talent. The availability of talent and the right kind of talent to it because when you start to have more and more companies who scale up a certain point you just need more and more people to work.
4. Did these startup companies improve the employment rate in Finland?
Employment rate is, it is a good question. I don't have the figures off the top of my head. But for sure if you look at just some of the companies that have been created as a consequence of the startup boom. If you will, they are employing thousands of people already within say five years from creation. So it is clearly creating new jobs.
Then the question is of course in the economy overall. You have people who are working in different kinds of jobs that are not kind of sometimes no longer there. So you have kind of unemployment being caused by different things. And the new employment by the startups on the other end of the scale.
5. Finland's economy has suffered for years after the decline of mobile giant Nokia. Were startups seen as a breakthrough during hard times?
I think they're playing a role. I think what happened by the way we're still having Nokia and Nokia today. They're no longer so clearly in the mobile phone business but they do 5G networks and other things that have a big patent business and they're actually doing surprisingly well. So about what happened as a consequence was, I think, this bigger maybe nationwide realization that 'OK we need something else too'. And many of the people who used to work for Nokia ended up starting their own companies. They had really deep technical skills and knowledge in certain niche areas so they could start their own companies. And certainly the kind of transformation or fall of Nokia, if you will, has I think contributed to a more resilient economy as a whole.
6. U.S. is famous for its Silicon Valley, the center of innovation. The South Korean government is also working to nurture many venture companies. What should Korea do to become the next Silicon Valley?
I think no one should aim at becoming the next Silicon Valley because you can become something better and by definition to every place would be different as well. I don't think Helsinki could try to be the next Silicon Valley either but we were something different. What should be done though, because it's a really fair question. Like how do you create this really fast-paced and flourishing innovation it causes and system.
I think it's about a critical mass and it's about a concentration of different kinds of players. You need the big tech companies that are sometimes investing sometimes acquiring younger companies or partnering up with them or serving as the first clients. You need universities and you need just kind of grassroots and empowerment in a way. And obviously you need financing as well.
So I think I actually really do like the model that Finland has been using with the public sector that they mostly are more hands off. But when there's a good initiative which is started by a grassroots movement or an individual people, the person or group of companies or group of people. And it's funded by private institutions then it might be a really nice and good addition and a booster in a way for the public sector to pour some more money.
So I think that's one thing. Matching the actions of the private sector but letting the private sector take the lead could work.
It might be different over here. One thing that Silicon Valley is obviously good at is it's just a huge level of interconnectivity both within Silicon Valley but also to the outside world so there's people from abroad flying in all the time. So. Kind of increasing the international appeal of companies out of Korea or Korea as it as a country, Seoul or Daejeon as a city, is also I think contributing towards the same goal.
7. Currently, South Korea's youth jobless rate amounts to some 11 percent. To tackle this issue, how can startups help improve the situation?
By young people starting companies or joining existing companies I think. Um. There of course there can be a thousand different reasons for youth unemployment. One thing. Could be. And I'm not saying that this is true. But one of the many reasons might be the fact that the young people who are unemployed, cannot find an attractive option for themselves. Sometimes for these people definitely not always, but sometimes, these people are starting their own company or starting their own initiative or projects of whatever kind could be a good option. If they don't fit in anywhere else they might just as well kind of do their own.
8. The South Korean economy is mainly reliant on conglomerates and exports. In this structure, this may be a bit difficult for startups to have a chance. Do you think the Korean government should provide more support for them? Or should more funds come from the private sector, like venture capital funds or angel investors?
To be honest I think to win, one needs all of them. I think that there can always be a lot of support from the government is not a bad thing at all. It just needs to happen in the right way and in a way that supports and serves the companies that are being built rather than being restricting. And that's much easier said than done. And I don't have a single answer on how to do that. But if you can make angel investing or venture investing from firm funds more attractive and if you can get the right people some of the brightest minds running those investment vehicles or becoming angel investors. I think that's a good shot.
And maybe one thing worth pointing out. I actually mentioned this on stage earlier today but I think a really interesting view that you can take on early stage investing is that it's kind of on a societal level. It's a selection mechanism for the future. So the people who are allocating money at the earlier stages are actually, they are making the decisions on what gets built or what can get built into scale. They decide which companies to invest in, which means that those companies have a higher chance of survival. As a consequence of the investment. So it is a big deal. Makes a big difference.
9. What potential do you see for Korean startups? What are their advantages or disadvantages?
All the South Koreans, both students and entrepreneurs, that I have met are sharing the same quality. So you are incredibly hardworking. That's very important. When you work when you're building a company you have extremely advanced technology both from the universities but also from the corporates. I think those two things alone can already serve as fantastic building blocks for the future. Additionally, I think there's a certain, there's a good level of trust. Among Koreans are kind of within in the society and that helps with many things, I think, trust is certainly one of the biggest assets that the Nordic countries have. In building companies or doing anything for that matter. It just makes cooperation easier. Right? If there is trust from the beginning.
10. Exit Daejeon 2019, or the Global Startup Festival runs until this Thursday here in Korea. What would you personally like to achieve through this event?
I think for me personally, I've been to Korea once before. I've never been to Daejeon. I've heard about it and I've heard it being called the Silicon Valley of Korea. So I was curious. I have read actually surprisingly many research papers out of KAIST. Out of the universities, I know that there are some really high quality research. Mainly for this event is just to meet people. Meet people who are exiting here and meet people who are building companies out of here. And so far, the companies that I have seen have incredibly interesting technology that they're working on and turning into products. So it's, I'm impressed.
11. Do you have any advice for startup companies?
I think the first thing is to follow your curiosity, wherever your curiosity takes you. That's probably a good direction. If it takes you someplace where it seems like there's a problem that could be solved by building a company, not all problems can be solved by building companies, of course. But if it is a problem like that, then building a company might be a good idea. If you're in that stage then finding better people than yourself to surround yourself with and kind of build a team with. If you do that successfully, you already get to really far.
Thank you for your time today.