Jante’s Law and the yearning for perfection
The charm and complexity of Stockholm’s start-up scene.
While game makers King file for a highly coveted US IPO, with Spotify soon set to follow, and Summly whizz kid Nick D’Aloisio spending his earnings on the Swedish e-retail start-up Tictail, the Scandinavian tech brand is currently at one of its all time highs, fuelled by a successful community of entrepreneurs, gathered in one of the most technologically forward nations in the world. However, anyone who spends some time in a place like Stockholm soon discovers a start-up world riddled with complex nuances and filled with paradoxes that have lead to a fair share of inconvenience.
Stockholm has certainly secured itself as a major European hub for exciting new start-ups, billed by both Wired and the Financial Times as one of the hottest cities to start new IT companies. While they are far from alone in the fight for the title of the latest fashionable start-up capital, the Swedish strain of tech aficionados and teams of go getters are known for being the sleekest. 1 million viewers in the UK watched the finale of the elegant Scandi Noir series The Bridge, making the genre, together with Borgen and The Killing, by far one of the most popular foreign imports to enter British TV in recent years. In fact, the world seems to love all things Nordic at the moment, from the food to the knitwear, and perhaps by simple cultural osmosis, the current attraction to all things stylish and Scandinavian has rubbed off on the start-up scene.
Rewind 6 months, and an e-commerce segment is airing on CNBC’s Tech Check show. Carl Waldekranz, one of the founding members of Tictail, an online platform provider for internet retail sites, is introducing his venture. He embodies the quintessential looks and outward persona of the Swedish IT entrepreneur: articulate and cheerful, thin round spectacles and floppy blonde hair, showcasing an energetic, almost naive ambition. The Telegraph journalist Peter Stanford has described Waldekranz as a “walking, talking advertisement for his country”, one where Carl, the company’s teenaged founder, was more interested in helping out his mother’s local pottery business rather than making millions.
Indeed, a natural sense of entrepreneurialism is deep rooted in the country’s culture, and has predictably embodied itself in the technology sector. As Jonathan Moules at the Financial Times argues, while Stockholm may not command the unbridled attention given to Berlin and London, it’s catching up, thanks to the roster of impressive IT companies emerging from the Swedish capital.
Some would argue that Swedes could thank their homeland for creating a successful start-up culture. Moules makes the case for it being a suitable location for technology entrepreneurs, pointing out that Stockholm and Swedes are inherently technologically savvy, with a high mobile phone penetration and one of the strongest internet connectivity rates in the world. How impressively, “unlike New York and London, things rarely break down in Stockholm”. Indeed, the city received a top ranking in PricewaterhouseCooper’s 2014 “Cities of Opportunity” index, scoring highly in both technological readiness and intellectual capital and innovation.
Furthermore, these entrepreneurial whippersnappers have a healthy history of local success stories to draw inspiration from. As angel investor Dusan Stojanovic explained to Venture Village, “if something has been extremely successful, people are inspired by it, so when it comes to tennis we had Borg, in skiing we have Stenmark, when it comes to IT we have Skype”.
Then there’s that other, less told story about the region. In his book The Almost Nearly Perfect People, Michael Booth — author, cultural correspondent and foodie — paints a more complex tale of Scandinavia, a tale of a culture plagued by insularity and social taboo. The almost perfection of cities like Stockholm have given them squeaky clean image of the area as a fertile breeding ground for ideas, but there’s a great deal torment involved as well.
For one, despite the flawless infrastructure, people would argue that the state hasn’t helped all that much. On the contrary, the city is regarded as a rather tough business environment. Therefore the success stories really are triumphs, where they made it despite the business climate in Stockholm, not thanks to it. As a result, many leave the region once they have blossomed, which is why you’ll find the HQ of many of the now Nordic giants in the skyscrapers of London and New York.
However, it’s not only the regular echoed complaints of red tape and tax heard around the spacious loft spaces in central Stockholm that are said to hold Swedes back from achieving their best on home soil. The traditional “Law of Jante”, a cultural principle that dictates that you are not to think you’re anyone special, or that you’re better than your neighbours, is said to shame people from promoting their own achievements over those of others. It is arguably something that still lingers in the hive mind of locals.
But could it have its advantages as well? Tictail’s Waldekranz recently argued in an interview with the FT that once companies have been set up, the Law of Jante has in fact played a role in helping businesses evolve in the region, removing detrimental corporate hierarchies. According to his experience it’s not unusual for junior employees to confront the CEO and say “I have some issues with the way you run your business”. The ingrained cultural law that has not only instilled a sense of modesty in its people, but also inertia to social status, is something that has long intrigued the wider business world. This is not least because no one can quite put a finger on what effect it has on how Swedes work.
Despite the global achievements of local start-ups, Stockholmers are still often reluctant to proclaim their accomplishments to the wider world, but have begun to show signs of breaking out of their shells. Despite this, when Scandinavia goes out of fashion, and there’s still a lack of a concerted effort from the state and Swedish society to create a proper and SME community, will Stockholm be able to seriously compete with the likes of Berlin and London?