Secret sauce of Estonian startup success has been revealed
General Partner, Siena Secondary Fund
Estonia is famous for its title of “the land of unicorns” as our small nation has managed to give birth to 10 unicorns which competes with Israel for the no 1 position in the world on a per capita basis. Many people around the world have asked what is the secret of our success. So far, the answers have been around quality of education, success story of Skype exit, engineering talent, and even cold dark winters :-) However, in my mind, these do not grasp the essence of the main reason why Estonian startups are successful. We need to dig deeper into the Estonian DNA, what distinguishes them from other startup entrepreneurs across the globe.
In my mind, the secret sauce is related to our willingness not to give up on trying. Finns have their own saying for that “sisu”, in English it is probably best described by the words “resilience” or “grit”. In the USA, a typical startup founder's journey is that they raise a few million dollars based on their great world changing idea and if there is no indication after 1-2 years that this will be THE rocket ship, then they just give up and move to another project. This is not a common theme in Estonia. Probably because we do not want to give up on the hope to change the world or just not willing to disappoint your invest, either way we are pushing ourselves further till we find the right product market fit and the rocket ship starts to fly.
To illustrate this - Estonian most famous startup podcast “Restart” has for several years nominated its annual “Startup of the Year” as well as chosen the “anti-startup” i.e. startup in which most investors have lost its hope. The alumni of this “anti-startup” list is impressive: Bolt, Veriff, Jobbattical and many others - companies which have turned out to be unicorns or soonicorns. Many of them struggled for years and then finally cracking the code for growth and become one of the most valuable technology companies in Estonia. If we look at the Toptech30 in 2022 we can see many companies which have followed the same path. Probably the most interesting case is Ready Player Me (formerly known as Wolf3D), which was launched almost a decade ago and has done several pivots during the journey, the most remarkable one probably that they started out as printing 3D fetuses. Who would have thought you will end up from 3D printing to a metaverse? Well, you don`t know that in the beginning, but if you have the resilience, you will find your way to the success. Estonians having resilience as part of their startup DNA, gives them advantage compared to other founders across the world. Be calm and keep on trying!