Ed Catmull's Legacy with Pixar HOMEPORT

THINKERS 20: THE BRIGHTEST BUSINESS MINDS IN NORTHERN EUROPE

2016

SETH GODIN The Brief History

MOMONDO'S PIA VEMMELUND Becoming a Global Player

MR. CREATIVITY Ed Catmull's legacy with Pixar HOMEPORT

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Who Owns the Future?

EDITORIAL Ojansuu Paula Newspapers and magazines, just like this one, are crumbling under the digital intermediaries such as Google and Facebook. Combined, these two media gate-keepers of the post-digital age already account for more than half of the digital advertising revenues globally. And why is that important? Because advertising has become the biggest business in the information economy, now fueling the next advancements in technology. In 2014, Google was reported to spend over half a billion dollars for the artificial intelligence startup DeepMind. Google now runs approximately 3,000 software projects involving AI technology called Deep Learning. The company executives have publicly stated that Google aims to become an “AI first” company. In an earnings call in March, Google CEO Sundar Pichai said that “we're at an exception- ally interesting tipping point where these [AI] technologies are really taking off.” Like Google, Facebook also operates their own AI lab, and these two are not the only technology behemoths betting heavily on AI and robotics. Microsoft has been working on machine learning since the early 1990s, and Apple and Uber have also invested heavily in artificial intelligence. Just a little over a year ago, Uber hired away 40 researchers at Carnegie Mellon’s National Robotics Engineering Center. In late May, Amazon CEO Jeff Bezos said AI has become a big deal and that his company has been working on AI behind the scenes for four years. The advances in teaching computers to think for themselves and improvise solutions to various problems have fueled speculation of their potentially devas- tating effect on human employment. In January, The World Economic Forum -es timated that in the next five years, over 5 million jobs could be lost to machines and robots in 15 major developed and emerging economies. However, the real economic and social consequences of machine learning are hard to predict and respond to. AI technologies can be astoundingly beneficial for humanity, but also result in increasing inequality. If the winner-take-all curve overwhelms the bell curve, it's going to be a lot harder to build a culture we can be proud of.

Tuomas Liisanantti Editor-in-Chief Nordic Business Report

NORDIC BUSINESS REPORT 2016 5 Contents Contents MARKETING

12 The Brief History of Seth Godin Seth Godin's far-reaching business ideas and books have been the go-to source for marketers and business leaders for over 25 years. What's next? Paula Ojansuu Paula

9 Getting Facebooked 24 Ain’t No Rest for Vaynerchuk How Facebook is taking over the world. Gary Vaynerchuk is building businesses to buy the New York Jets. 19 The New Breed of Digital Marketers Marketing by engineers or engineering 28 Tony Hawk: “Engage Your Audience” by marketers. Personal branding done right can create great opportunities.

RANKING Thinkers 20 – the Brightest Business Minds in Northern Europe Thinkers 20 – the Brightest Business Minds in Northern Europe THINKERS

20 – the Brightest Business Minds in Northern Europe

36 The comprehensive ranking of the brightest business minds in Northern Europe. This year’s rank- Thinkers 20 ing features 20 brilliant business thinkers who are – the Brightest Business Minds changing the world with their ideas and accom- in Northern Europe plishments.

6 NORDIC BUSINESS REPORT 2016 Contents

DIGITALIZATION 30 Mr. Creativity

Edwin Catmull has blazed a trail as a computer scientist turned business leader who has sustained the creative talent and innovative legacy of Pixar Ani- mations Studios for 30 years.

46 SaaS Isn't New Anymore, 53 Running Past the Internet of 61 Betting on Digitalization And It's Here to Stay Things The pace of digitalization is Two SaaS company pros share Prepare yourself for the fourth forcing CEOs to go all in. what works and why SaaS isn’t industrial revolution. going anywhere. by Maria Holm 62 Hacked by a Unicorn? by Mikko Hyppönen 48 Q&A with Pia Vemmelund 56 The Power of Platforms Understanding the network 50 Q&A with Anita Krohn effects that shape our world. Traaseth

EDITORIAL BOARD

EDITOR-IN-CHIEF RANKING EDITOR Tuomas Liisanantti Hans-Peter Siefen

ART DIRECTOR REPORTERS Janne Lahtinen Devin Kate Pope Jukka Niemelä EDITOR Contact Information: Anniina Turunen Nordic Business Report Kauppakatu 41 B 14 CONTRIBUTING EDITORS 40100 Jyväskylä, Finland Denise Wall +358 20 775 1390 Andrew Scholfield [email protected] www.nbreport.com

ARTWORK

COVER ART PHOTOGRAPHS Nigel Buchanan Agnete Brun Deborah Coleman INFOGRAPHIC Cooper Naitove Ramesh Nair Paula Ojansuu Publisher: Nordic Business Report RANKING DRAWINGS Bill Wadman Production: Nordic Business Report Matias Teittinen and Serus Media Oy Press: Uniprint, 2016 ARTICLE ILLUSTRATIONS Tiina Kälkäinen

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NORDIC BUSINESS REPORT 2016 9 Marketing

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Bill Wadman Marketing

The Brief History of

SethBY TUOMAS LIISANANTTI Godin

Marketing author Seth Godin has become a business philosopher. What’s next?

fifty-minute drive away from Midtown pass it almost always points in exactly the direc- Manhattan, in an area known as Hast- tion we ought to be going,” he explains. ings-on-Hudson, a downpour pound- Godin, who is fifty-five, became known as a A ing the city streets is forcing everyone marketing author but has cherished the fear of without an umbrella to run under the nearest freedom to the point that his writing has grown roof. Stepping into the elevator; Seth Godin is harder to categorize. The path towards the more catching his breath – not because of sprinting in philosophical, almost poet-like texts began when the rain but because of a rush caused by a pit stop Godin documented his ideas on delivering antic- at a bakery. ”Barely made it on time,” Godin says, ipated, personal and relevant messages that peo- carrying a bag of cookies. Only a minute later he ple want to get, thus revolutionizing the world of is already in the zone, fiercely typing away at the marketing. external keyboard of his MacBook Air. This ability, to quickly transition his energies onto the written 1999: Permission marketing word, has resulted in 17 books and over 5,500 blog ”Marketing and advertising were the same thing posts over a 30 year career. then, and people thought that if you had money, For Godin, there’s no such thing as writer’s you could interrupt whoever you wanted,” Godin block. The habit of showing up on a regular ba- recalls. sis and of writing when it’s time to write trumps He had started an internet company in 1995, the occasional feelings of resistance every time. In called Yoyodyne, based on only contacting people fact, in Godin’s mind, resistance is a symptom that who wanted to hear from the company, but was he is on the right track. ”You’re nervous and afraid having trouble explaining to big companies and because something might not work. We can’t fight clients why it worked. It would take months for it, but we can dance with it. If we use it as a com- Godin to make a sale so, since he understood how

NORDIC BUSINESS REPORT 2016 13 Marketing

to make books, he made a book about it. This led Marketing By going forward, Godin believes that those to quite a journey. is fueled by marketers who treasure attention, who cherish it, Godin got kicked out of the Direct Marketing adrenaline. who grow it and nurture it, will do better than the Association because ”they didn’t approve of my ones who are just racing around with an emer- heresy.” However, a few marketers started to em- gency. However, overcoming of one’s narcissism brace the concept, and soon many internet com- might be an even bigger obstacle to getting peo- panies started to use the idea as the sole basis of ple to care than running around like a headless their marketing. Billions and billions of dollars chicken. in value was created and still today the concept ”The biggest mistake marketers make over and of permission marketing lives strong through its over again is the hubris of selfishness. The narcis- close cousin ’inbound marketing’. sism of ’I made this. It was really hard. You should ”I’m not responsible for all the email you get look at me. I own, and you owe me your atten- in your inbox, but the email you want to get; tion’. There’s no humility there. There’s no gener- I’ll take a little bit of credit for that,” Godin osity there. There’s no connection there. So, that chuckles. is the big shift that we need to make. We need to But, if good results in marketing were so easy make this shift away from having a tantrum and to achieve, everyone would succeed. In the world acting like a three-year-old to patiently earning of 90-day justifications, figuring out the long game the attention of the people we seek to serve,” Go- is still easier said than done. ”Marketing is fueled din explains. by adrenaline. It’s fueled by urgency and emergency. We see it at its worst in political campaigns, 2005: All Marketers Are Liars but we see it everywhere. We don’t have time to do There are a thousand ways to tell a story, but is it right, but we always have time to do it over. We there a true way? Maybe not. The truth is elusive. overcome our fear by creating an emergency. But However, worldviews are changed by telling sto- this endless emergency is caused by the fact that ries. So, who’s truths do we believe? Although Go- we're not patiently working our way to a place of din was set to explore the underlying questions relevance. In fact, urgent patience, not hiding, but of storytelling in the book he considers the most patiently building an asset is probably the single important book about marketing he has written, most overlooked thing that marketers fail to do,” he fell short when naming it. The otherwise catchy Godin sighs. cover implied the book to be about lying, and that marketers were bad people. Luckily, Godin got to 2003: Purple Cow do a retake and the new cover, All Marketers Tell In 2003, Godin’s thesis about half-measures sim- Stories, hit the streets in 2010. ply not being enough, attention being the game, Even though consciousness and the human and remarkability living on the edges, manifested mind are still some of the greatest mysteries of itself in the book Purple Cow. As a natural contin- science, understanding how humans process in- uum to Permission Marketing’s ’May I have your formation and how the story being told fits into attention, please?’ Purple Cow got to the heart of the listener’s existing worldview are fundamental what it means to grab someone’s attention by be- building blocks for a marketer. The latter can only ing remarkable. be achieved by being culture smart. ”People only buy from you for two reasons. “Stories need fertile ground to grow in, and They know you exist, and they trust you. Aware- that comes from our culture. The culture is all ness and trust, that’s all,” Godin encapsulates and around us. Culture destroys everything. Culture continues, ”The thing about awareness is they’re beats the truth. Culture beats math. Culture beats not making any more of it. The thing about pay- any offer you can make. So, we have to understand ing attention is if I pay you my attention, I don’t the culture, and we have to understand the world- have it anymore. It’s gone forever. So we’re getting view. We have to understand the perspective of more and more focused on keeping our attention the person we are talking to,” Godin emphasizes to ourselves, not giving it to whoever shows up. and explains that it’s the marketer’s job to tell a Marketers have a history of just taking attention story that resonates with people who are hear- and wasting it.” ing it. If done properly, it wouldn’t take progres-

14 NORDIC BUSINESS REPORT 2016 Marketing

Cooper Naitove

sive ideas, like doctors washing their hands before “I guess the way I interpret it is; I cried when they delivered a baby, thus preventing the deaths I wrote Tribes, and I didn’t cry when I wrote Per- of millions of babies, to take 20 years before others mission Marketing.” would start acting on them. If only Ignaz Sem- melweis, Hungarian doctor and the early pioneer 2010: Linchpin of antiseptic procedures, would have been a bet- If Tribes opened the gates of the leadership genre, ter storyteller. Godin’s next bestseller, Linchpin was an ode to the indispensable workers that refuse to be average and 2008: Tribes pour all their energy, heart and soul into their work. A tribe is any group of people, large or small, who The idea of Linchpin comes down to the are connected to one another, a leader, and an fact that work as we know it is now going away. idea. Leadership has to come from individuals, That job, where you go to a building, stay there and part of leadership is the ability to stick with 40 hours, then go home, and do that again for 40 the dream for a long time. Long enough that the years before retiring, that’s gone. Efficiency as a critics realize that you’re going to get there one competitive advantage no longer suffices. Some- way or another, so they follow. From these premis- one always has more robots and someone is going es arose Godin’s best-selling book. Tribes opened to be cheaper. Then what do you have? up a whole new audience for him as it resonated “Well, what you have is people. And the ques- with people craving for leadership lessons. On a tion is: do you have compliant people; people who personal level, it was the first book where Godin do what they’re told, show up on time, get more got “at the heart of the change” he is “seeking to efficient each day? Well, that’s not going to help make in the world”. The book was about chang- you very much because that’s what you need in ing the status quo and not minding about the crit- an efficient factory. Or do you have caring peo- ics, at least if the only side effect of criticism is ple, passionate people, connected people? Do you that you will feel bad about the criticism. Bene- have people who act like they own the place? Do fits of doing something worth doing far outweigh The orga- you have people who can look a customer in the the bad feelings. The message of Tribes, that all nization of eye and make a difference for that customer, be- of us are more powerful than we think, and all of the future cause it seems to me that’s all you’ve got left,” Go- us have the ability to make things better, became doesn't din says and continues: much more important for Godin than anything he need a lot of ”Once it’s a robot, anyone can buy the robot. had written before. people. But that person, that person works with you –

NORDIC BUSINESS REPORT 2016 15 Marketing

not for but with you. And no one else can have What if What he means is that talent is wanted, but them as long as the two of you are dancing to- many of us only as long as that talent is productive and pre- gether. That’s where success lies. You don’t handle are flying dictable. Talent is wanted, but only if talent means linchpins. You welcome them. You embrace them. too low? more work product per dollar, more effort per day, You nurture them. The organization of the future more of what we think we are paying for. doesn’t need a lot of people.” According to Godin: “We can’t hope for a boss What Godin thinks these organizations need or a colleague or an employee who is one in a mil- is the kind of people who are willing to make a lion and then demand that this person have no difference, who are willing to stand up and say, grit; do nothing to slow down the assembly line. ’I made this.’ Linchpins, who are restless enough It’s one or the other. If the organization desires ef- that if things are not kept great, they’ll leave be- ficiency, it must embrace the status quo and avoid cause someone else wants them. “Isn’t it better to grit at all costs. On the other hand, the organiza- have someone so great, you would miss them if tion that wants growth and seeks to create value, they were gone than it is to have mediocre peo- has no choice but to hire linchpins. The ones we ple who you are confident have no place better to can’t live without. The ones that stand for some- go?” he asks. thing. The ones with grit.”

2012: The Icarus Deception 2016: ... ‘I know it’s over,’ Icarus says to the sun. Indeed, the Continuing his work in writing about treating wings melt causing Icarus to plummet into the people with respect, changing economy and ideas sea and drown. The lesser known part of the Greek that spread, Godin says he is now spending a lot myth tells that on top of warning Icarus about fly- of time “thinking about how deeply the fork in the ing too close to the sun, his father, Daedalus, al- river is getting dug into the ground.” He beckons to so told his son not to fly too low as the seawa- the right and left with his hands, explaining that ter would dampen the wings. So, what if many of on one side are the connected people who go ever us are flying too low? In his most personal book, deeper doing the research, looking at what works, The Icarus Deception, Godin explains why all of us testing, measuring, figuring out what’s going to should become artists of our craft and share more pay off for our culture. And on the other side are of ourselves with the world. Flying too low, Godin emotion driven, knee-jerk, fear-based reactions of believes, is the far more common failing. A cou- ‘pick your own truth’. The problem he sees with ple of misunderstandings about skill and talent ‘pick your own truth’ is that it leads to conspiracy lie at the heart of the problem. First of all: Skill theories, which leads to ever more ‘pick your own is something you learn. Talent is something you truth’. “And sooner or later, you are just living in were born with. Ga Ga land where there’s no real connection to “I will grant you that dunking a basketball is the things you believe and do, and what actually a talent. I will never be able to dunk a basketball. works,” he says. But with few exceptions, almost everything in our “I think we have to figure out how to bridge life is a skill,” Godin begins and soon continues, these gaps early and often to help people realize “I’m not going to get into the NBA, so let’s leave that the things we take for granted, that we can that off the table. For everything else, it’s about be warm and out of the weather and have enough skill, and skill is easier to acquire now than ever to eat and all these other things, they came from before.” a philosophy of test and measure. A philosophy So, the first mistake, according to Godin, is to of paying it forward and building a culture. I feel let yourself off the hook by saying, ‘Well, I wasn’t ever more urgency that we need to do that now,” born able to do that.’ Godin finishes. Another thing about talent, or ‘the talent lie’, “I got to run. Do you want some books? Or as Godin puts it in The Icarus Deception, is the cookies?” Godin asks. twisted way we look at talent in our organizations. Five minutes later Godin is gone, but his lega- “It’s not a lie because there’s no talent out there. cy remains. Books and a bag of cookies. And only It’s a lie because many organizations only pretend the cookies have a ‘best by’ date. that they are looking for talent,” Godin writes.

16 NORDIC BUSINESS REPORT 2016

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Paula Ojansuu Paula The New Breed of Digital Marketers BY TUOMAS LIISANANTTI

Marketing. Not something one does, but something built into product itself.

n what seemed like a Onormal day in 2012, Ryan Holiday, then the Director of Market- ing at American Ap- parel, went on with his day like every other marketing executive for the last 75 years: buying advertisements, planning events, pitching reporters, designing creatives, approving promotions, and

NORDIC BUSINESS REPORT 2016 19 Marketing Paula Ojansuu Paula

throwing around terms like CPM, earned media, The product what he calls ’product market fit’ or PMF. In the top of mind, and share of voice. ”That was the job. should be world of cool buzzwords and acronyms, all this That had always been the job,” Holiday explains. amazing. can easily sound like just another gimmick to According to Andrew Chen, now working on throw a smokescreen over marketing. Holiday ac- growth at Uber, this was about to change. The knowledges that growth hacking can be a bit of a so-called ‘growth hackers’, hybrids of a marketer buzzword, but explains that he actually sees it as and a coder, were about to disrupt the marketing marketing in its purest form: ”It’s as if you took teams. Chen’s article, Growth Hacker is the new VP traditional marketing, direct marketing, product of Marketing, explained how the new breed of mar- development, business development and engi- keters was answering the traditional question of, neering, and combine them into one person who’s “How do I get customers for my product?” Their fluent in all these different fields, but all they care answer, which was using A/B tests, landing pages, about is what works for this specific product and viral factor, email deliverability, and Open Graph, this specific moment.” was a real wakeup call for Holiday. ”Companies from Dropbox to Instagram to Getting to Product Market Fit AirBnB were basically attracting millions of us- Holiday summarizes the idea behind PMF with a ers with zero traditional marketing. And my days quote from the 18th-century essayist Ralph Wal- were built around traditional marketing efforts,” do Emerson: “Build a better mousetrap, and the he recalls. world will beat a path to your door.” Many have In the absence of big budgets, startups had taken the metaphor literally, with the mousetrap learned how to hack the system to build their being the most frequently invented device in U.S. companies. After a thorough look into growth history. However, Holiday’s emphasis is on under- hacking, the pattern started to become clear in standing that the product or service has to be put Holiday’s mind. Growth hacking had rethought under serious examination for it to become re- marketing from the ground up, starting from markable, and hence marketable. ”It’s not about

20 NORDIC BUSINESS REPORT 2016 Marketing

the product being fine. The product should be keting tactic. More often than not, capturing the You’ve got amazing,” Holiday insists before continuing, ”Us- world’s attention requires relentless efforts to cut to live and ing the data and the tools, we have to figure out through the noise. For Holiday, product develop- breathe this what people actually want from this thing so it ment is the foundation of marketing. However, he thing! actually has all the hallmarks that are required for is also quick to point out that it is only one piece something to go viral.” of the pie. A prime example of tweaking a product to fit ”What a growth hacker is doing is priming the the market’s needs was seen in 2010 when Kevin pump essentially,” he says and notes that all sorts Systrom and Mike Krieger decided to refine their of digital and non-digital marketing skills are re- location-based iPhone app, called ‘Burbn’, around quired to drive traffic, build email lists, and work the one feature that saw user traction – photo the media so that the result is increased demand sharing. Soon after, they rebuilt and renamed the for the product. app and Instagram was born. So, the question then arises, if marketing is be- With the benefit of hindsight, it’s always easier coming increasingly more digital, how technical to be a smartass about the superiority of business does a marketer have to be to drive results? decisions based on a semi-scientific approach. ”It’s not so much can you program, but can you However, collecting and believing what the data interface and work with programmers? Can you shows is easier said than done. think of how they think about the world?” Holi- ”It’s hard for people to question their instincts day clarifies. or impulses. We don’t like it because we are scared Holiday also feels strongly about marketing of what we might find, and that we might have to being an in-house job rather than something to change things or do things that are uncomfortable be outsourced. ”Who cares more and is more ex- for us,” Holiday ponders and adds that ”that’s not a cited about this product than you?” he asks, and good reason to not question what you are doing.” explains how he thinks about marketing: ”It’s not just a job. You’ve got to live and breathe this thing!” Hacking Growth After dropping out of college at the age of nine- As nice as the Emerson’s quote would sound for a teen and creating a variety of attention-grabbing product development oriented person, hands on media stunts, while working for authors like Rob- experience of getting the word out and a product ert Greene, Tucker Max, and Tim Ferriss and, of to sell has shown to many entrepreneurs that the course, the controversial clothing company Amer- better product alone is rarely enough of a mar- ican Apparel, Holiday rose to internet fame as a Paula Ojansuu Paula

NORDIC BUSINESS REPORT 2016 21 Marketing

Before anyone goes getting knee deep into content marketing, Holiday poses two questions

Paula Ojansuu Paula for you to think about: ”What is something only I can say?” and ”How can I reasonably expect this to help my business?” When it comes to tweaking a piece of content to give it what it needs for it to go viral, he reminds that people share usually because they agree or disagree with what was said, or that it says something about their identity.

Closing the loop Product market fit, growth hacks, and virali- ty aside, marketing for growth hackers isn’t just about leads. It’s also about conversion. Which is right in line with the basic principles of customer development. In the end, the focus is on improv- ing customer retention. “You don’t get an award for just getting a lot of traffic,” Holiday emphasizes the importance of getting good outcomes in the acquisition phase to affect the bottom line. However important the top of the funnel might be, retention trumps acquisition in the mind of growth hacker’s every time. This comes back down to the product itself. If a feature inside marketing protege. Now at the age of 29, his ad- the service drives better user adoption and causes vice for the young aspiring marketers emphasiz- them to stick around, it’s marketing. Also, there’s es the importance of learning to build something only so much a marketer can do to grow a broken from an idea to something tangible. product. ”If you were a young person trying to make it To further highlight the importance of often in the marketing field, I would say don’t go work at neglected optimization and retention aspects, an agency. I think you want to go where someone Holiday cites a classic study by Bain & Company, is making stuff. You want to work on something along with Earl Sasser of the Harvard Business you can take from nothing to something because School, which showed that a 5 percent increase in that is how you learn the whole stack.” customer retention leads to an increase in profits of between 25 and 95 percent. Engaging through content To tackle the highly subjective issue of eval- In the spirit of permission marketing, a concept uating “improvement”, Holiday introduces the made popular by the marketing author Seth concept of customized metrics. Key performance Godin, Holiday is a big believer in building up indicators that are tweaked to showcase success- marketing assets way before a product is being es in the onboarding process better than just the launched. He underlines the importance of mail- ones that automatically show up on anyone’s Goo- ing lists and perseverance when creating content, gle Analytics dashboard. but is also quick to mention that ”the crappiest “Facebook’s focus was on users who added reason” to do content marketing is that all the oth- seven friends in 10 days. At Dropbox, it was drag- ers are doing it. ging at least one file into your Dropbox folder— ”Content marketing is either very expensive not just creating an account.” and very unsuccessful, or it can be very cheap and In the end, whether the current state of the very successful. If you want that latter part, you product or service is bad, great, or something in have to actually like what you are doing,” he says. between, it can always be better.

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5 Marketing

Gary Vaynerchuk and VaynerMedia are out to conquer the digital marketing landscape.

Ain’t No Rest for Vaynerchuk

BY TUOMAS LIISANANTTI

24 NORDIC BUSINESS REPORT 2016 Marketing

e is outspoken. His work ethic made his Many think “Amazon and eBay are grossly underestimat- brother suspect that he is a robot. And that I'm all ed on how much they grew by being unbelievable one day he is going to buy the New York shizzle. Google AdWords advertisers,” he says. HJets. His name is Gary Vaynerchuk. Best known as the wine-turned-social media Clouds and dirt guy, Vaynerchuk runs a 600+ person digital market- Vaynerchuk’s rise to prominence in the marketing ing agency, VaynerMedia. Now in its seventh year, world has been largely based on videos. During his VaynerMedia is posting a massive $100M in reve- time at the Wine Library, he churned out 1,000 ep- nue, just opened its first European office in -Lon isodes of his YouTube show Wine Library TV. To- don, and has anything but modest goals in mind. day, his YouTube channel is bursting with content “I want to build the greatest marketing agency on marketing, entrepreneurship, and all things in the history of all time, and you can’t do that by business. just being in the United States. Our goal is to con- Despite the number of videos that speak to the textualize every corner of the globe, understand importance of humility, a quick look at Vayner- the end-consumer in each of those markets, and chuk’s online or stage presence can easily give the then understand the right place to communicate impression that he is arrogant or egotistical. whatever our clients’ goals are,” Vaynerchuk ex- “Many think that I’m all shizzle,” Vaynerchuk plains. Fasten your seatbelts. acknowledges. “Well, are you?” I ask. Boy gone wild “I’m far more steak and substance than my Born in the former Soviet Union, Gary, the young- personality on stage leads people to believe.” er brother of the Vaynerchuk family, immigrated Then why all the misconceptions? to Edison, New Jersey, in 1978 and soon came to “The showmanship disguises a lot of the sub- epitomize grind and hustle. He didn’t do well in stance that I’ve created in building actual busi- school, where, in his words, he “sucked shit” be- nesses, investing in actual companies, and con- cause he “couldn’t give a fuck about Saturn”. Luck- sulting actual companies. But I accept that and ily, Vaynerchuk had entrepreneurial DNA, which recognize that is a casualty of being hyperbolized has always worked to his advantage. for being too aggressive on stage or in interviews, At age 14, Vaynerchuk, the kid with the foul so I live with that. I don’t expect people to take a mouth, had to abandon his cash cow, a baseball lot of time to figure me out. That’s not on them; card business he had built, to work at his dad’s that’s on me.” liquor store. Exuberance is Vaynerchuk’s default Fully aware of the fact that his mom might mode, in business as in life, but the years work- have instilled an overdose of self-confidence in ing in the basement of Sasha Vaynerchuk’s wine him, Vaynerchuk also knows that sheer will is not shop, then called Shopper’s Discount Liquors, enough to run a hundred million dollar business, weren’t exactly the happiest of his life. let alone provide value for customers like PepsiCo After making thousands of dollars a weekend or L’Oréal. selling baseball-cards, earning 2 dollars an hour “I can’t be successful by just saying it. I have bagging ice would understandably make any to put in the work, and I’m willing to do that. I’ve teen’s life miserable for a moment. However, af- shown myself that if I put in the work, I have a ter the dark ages were over, and Vaynerchuk was talent for learning on the job and over a period of allowed upstairs to serve customers, he was more time becoming successful,” he says. enthused about getting back to the art of selling. “VaynerMedia is successful because I have With a little help from a ‘friend’ called the Inter- been running it day in and day out. 15 hours a day net, he eventually managed to bump up wine sales working very hard and patiently over the last sev- from 3 million dollars to 60 million. en years,” he adds. Much of the increased sales came through mas- tering Google AdWords, a marketing tactic Vayner- I can't be The current state of the Internet chuk considers one of the greatest of all time. Espe- successful Online advertising is looking more and more like a cially in the early 2000s when few had discovered by just ‘winner take all’-environment, many practitioners the power of premium positioning in search results. saying it. are expecting to see a real dogfight between Face-

NORDIC BUSINESS REPORT 2016 25 Marketing

on behavioral developments in the internet space, Vaynerchuk himself is not betting the farm based on his ability to call a winner. “I don’t think that I’m some sort of Nostrada- mus or an unbelievable predictor. I actually think I’m much more practical. I look at data. I look at the top of the charts at AppStore and watch people’s behavior. I don’t think it’s so revolutionary to think Snapchat is an important platform when it has a hundred million monthly active users,” he points out.

What can I do for you? On top of going all in on up-and-coming attention-grabbing channels, one of the biggest reasons Vaynerchuk’s messages cut through the noise is his unparalleled verbal talent. Hitting the ‘record’ button and starting a rant on a random topic comes naturally for Vaynerchuk. Summarizing complex topics in sharp one-liners happens almost on the fly. His most enthusiastic fans, whom he calls ‘the Vayniacs,’ are more than eager to ex- plain to their peers how “marketers ruin everything”, why it’s important to “day trade attention”,

Kuvaajatieto and how landing a “right hook” is okay only after “jabbing” first. book and Google in the upcoming years. On mo- I think One of Vaynerchuk’s most cherished principles bile, both behemoths combined already account there's enor- is the 51/49 -rule. Broken down it means, whatev- for over a half of global ad revenue. While Google mous lever- er the relationship, always give more value than is still ahead in numbers, Vaynerchuk feels that age in being you get. If the only legacy he could leave to his kids in the future Facebook might have a slight advan- more valu- was marketing advice, 51/49 would be at the top tage “because of its never DNA” combined with able in every of the list. the fact that the current state of the internet is relationship. “51/49 is something I’ve always lived by. I think changing fast. there’s enormous leverage in being more valuable “They have been brilliant. They have been very in every relationship,” Vaynerchuk says. smart in becoming the layer on top of the internet Although the word ‘leverage’ could easily give itself. I’m very bullish on the company,” he says of the otherwise altruistic concept a cold and ma- Facebook. nipulative overtone, Vaynerchuk is not too wor- Even though online advertising spend is in- ried about being misunderstood here. creasing fast, digital still accounts for less than After all, Wharton’s top-rated professor Adam 30% of all advertising revenues globally. When Grant has already demonstrated in his bestseller asked why it’s not at least 50%, it takes Vayner- book Give and Take that those who always aim to chuk less than a microsecond to start reeling off contribute to others, achieve extraordinary re- reasons. sults across industries. “Just tradition. Slow moving big companies. Then, if giving more than you take provides Legacy. Reporting. Non-entrepreneurial DNA. Be- leverage and Archimedes already knew that with ing safe with your behavior because your compa- a lever long enough one can move the world, why ny is built on being safe. Cliché stuff.” aren’t more people giving it a try? Although his track record in early stage in- “It’s actually stunningly rare. I’m surprised by vestments in companies like Twitter, Uber, and how many people have not figured that out.” Snapchat is reason enough to trust his intuition Think about it.

26 NORDIC BUSINESS REPORT 2016 FOR CURIOUS PEOPLE LIKE US Gather a big or small group together to hear the latest news. Fill the space with new ideas and celebrate successful innovations and encounters.

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Tony Hawk: “Engage Your Audience”

BY JUKKA NIEMELÄ Fame does not mean that you have to change. on products in stores that I had no Tony Hawk never grew out of skateboarding and knowledge of,” says Hawk and contin- considers devotion to be a key for success. ues that, “I am glad I went through it at a time when there was no YouTube, Instagram and Twitter. It was at a time Tony Hawk became a profession- Having the enthusiasm and de- when those mistakes were not so am- al skater at the age of 14. For 30 years termination to always get better was plified.” After learning how to control he has been on board, promoting the Hawk’s way of life. His parents were his brand, Hawk became an avid user of sport both nationally and globally. To- not raising a professional athlete, but social media and started to understand day, Hawk’s billion-dollar console and happy that he had something to put how to navigate the new media and it’s computer games franchise, videos and all his energy into. Hawk says moving new ways of communicating. movies reach people in every corner into the entertainment business was “Marketing is a way to connect to of the globe while the poorer areas en- his own idea. He had gone as far as he your audience. It’s a way to promote joy skate parks built by the Tony Hawk could with skateboarding and had had and to engage fans,” Hawk concludes. foundation. Hawk, who many consid- enough of competing. It was time to ex- Although being authentic is important, ered a hyperactive kid himself, says he plore new opportunities to present and marketers need more. Hawk urges mar- was just energetic and not a talented promote skateboarding. keters to be interesting and offer some- skateboarder in the beginning. He had Contrary to a common belief, Hawk thing desirable. to approach the sport differently than doesn’t consider his personal brand as There’s a fine line between keeping the others and create his own way to the biggest asset of his business accom- it authentic and marketing aggressive- figure it out. Today, Hawk is still argu- plishments. “I don’t think that was the ly, but for Hawk the fear of becoming ably the best known skateboarder of all catalyst for success,“ he says. In fact, the a sellout is not something that should time. “I still walk the walk. I skate al- right type of branding required learn- hinder the branding efforts. Afterall, most every day. It’s not like I grew out ing from his earlier mistakes such as what he has realized is that the only of it ever,” Hawk explains how he has being too loose with how his name was time people call you a sellout is when stayed relevant for such a long time. used; “Suddenly I would see my name the stuff finally sells.

28 NORDIC BUSINESS REPORT 2016 WE KNOW THE SECRET BEHIND HAPPY AND HEALTHY EMPLOYEES

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MR.

CreativityBY ANNIINA TURUNEN

From the world of Walt Disney, through a galaxy far far away, to beloved stories of toys, bugs and furry monsters, Edwin Catmull has blazed a trail as a computer scientist turned business leader who has sustained the creative talent and innovative legacy of Pixar Animations Studios for 30 years.

hen you call Pixar Animations Story behind the story Studios, you are greeted with the- Pixar celebrates its 30th anniversary in 2016. atrical background music. The During the past 30 years, the film studio has re- Wmelody is the soundtrack of The leased 17 feature films and grossed over $9.7 bil- Good Dinosaur, which was released in late 2015. lion worldwide in revenue to date. However, the You can almost imagine this song playing in the spark that ignited the Pixar flame dates back even background while Catmull walks past the man- further to Catmull’s childhood. Back in the 1950s, sized, Lego reproduction of Toy Story action hero the young Catmull was totally fascinated by Walt Buzz Lightyear at the headquarters of Pixar. Disney and his television appearances, in which Suddenly a friendly, warm voice interrupts the he revealed how Disney stories actually came to music. Edwin “Ed” Catmull is on the other end of life. the line. The co-founder of Pixar Animation Stu- “It was not only about storytelling but he also dios and President of Pixar and Walt Disney An- talked about the process and the technology. So imation Studios, who leads hundreds troops to I grew up having them both joint together in my help break the barriers of human creativity. A man mind,” he describes. whose failure with traditional animation led him Come to think of it, Catmull seems to be fol- to discover a new way in which to revolutionize lowing in the footsteps of his childhood idol by the world of animation. A man who could right- revealing the wizardry of his craft in his book fully be called Mr. Creativity. Creativity, Inc.: Overcoming the Unseen Forces

30 NORDIC BUSINESS REPORT 2016 Digitalization

If you make it safe for people to talk, then they all become tivity more creative.

NORDIC BUSINESS REPORT 2016 31 Digitalization

That Stand in the Way of True Inspiration. Only for glomerate in 2006. Seems like all Catmull’s boy- Catmull the focus is not so much on the actual hood dreams came true after all. process of filmmaking, rather he taps deeply in- to the details of inspiring a creative culture and Want creativity? leading people. Make it safe for people to talk It was also Walt Disney who inspired young There would be no Pixar without the technolo- Catmull to dream of becoming an animator. How- gy Catmull and his crew developed and built so ever, when Catmull graduated from high school, tenaciously for decades. However, as much as he discovered there was no clear path for him to Catmull values their computer animation break- animation. Instead, he decided to pursue a career throughs, there is one other element in which he in physics and computing. takes as much pride and that is Pixar’s creative “I initially switched to physics because I want- culture. ed to be at the frontier. At this time computer sci- “The first agenda was to figure out how to ence was brand new, and while I graduated with make a movie using a story and technology, but my undergraduate degree in physics, I realized the second agenda was how people work togeth- that with computer science I was already at the er and what it is that makes a group successful,” frontier.” That was back in the 1970s. he explains. Little did he know that physics would put him As time went by, this secondary mission as- on the path to where he always wanted to be, cre- sumed greater importance and he realized that he ating inspiring stories. During his studies, Catmull had stepped away from technical work. Instead, joined other computer graphics pioneers of and he started spending his time figuring out how to found a way to combine his love for both technol- remove fear from an organization and ultimately ogy and animation. Soon he set himself the goal of how to make it safe for people talk. For Catmull, making the first computer-animated feature film, safety is essential for creativity. “If you make it safe which he tirelessly worked to accomplish for 20 for people to talk, then they all become more cre- years. ativ e.” While he figured out how to turn computer Catmull believes that everyone has inherent graphics into life-like 3D, Catmull moved into the creativity, which he defines as problem solving field of motion picture production and in 1979, and expression. Yet what often prohibits us from he joined George Lucas at Lucasfilm, where he expressing ourselves or tackling the problems we became Vice President at the seminal Industrial face is a matter of our own internal barriers and Light & Magic computer graphics division. blocks. “That if somebody is not saying something Catmull’s years of helping breathe life into when they are working on a problem is because Lucas’ vision of Star Wars with jedi knights and they’ve got fears and worries.” droids came to an end in 1986 when Lucasfilm A good leader doesn’t try to make people cre- decided to sell the computer graphics division. ative. What a leader ultimately needs to know “is Lucasfilm didn’t share Catmull’s passion for com- how do you remove people’s internal barriers and puter-animated films and the animation wizard allow them to grow and to flower,” Catmull pon- knew he needed a partner who would support his ders. In order to do that a leader needs to know dream. In the end, it was none other than Steve what those barriers are. Jobs who bought the division and paved the way One good example of how to remove barriers for Pixar Animations Studios to work its big- to participation is Catmull’s idea of changing the screen magic. shape of Pixar’s meeting room tables. You see, Cat- Finally in 1995, after several successful com- mull noticed that sitting around a long elliptical puter-animated short films Toy Story, the stu- table created a certain hierarchical structure in dio’s first feature film, was released in theaters. It the meetings. However when management sat in became the highest grossing film of 1995, mak- the middle, the conversation hovered around the ing $192 million domestically and $362 million A leader table’s midsection, leaving out the people sitting worldwide. Since Toy Story Pixar has produced has to be at the ends. one blockbuster after the other and was eventu- honest and Catmull wanted everybody to participate ally snapped up by the Disney mass media con- vulnerable. in the conversation so, he decided to switch to

32 NORDIC BUSINESS REPORT 2016 Digitalization Deborah Coleman Deborah round tables. This small practical solution com- I believe that Look for potential pletely transformed the atmosphere at meetings everybody No one in an organization is immune to their own simply because people now felt more equal. Many is inherently internal fears, not even leaders. In the same way times it is the smallest things that matter, things creative. that employees may have fears that prevent them that we are not always even aware of. from being more creative, leaders may also struggle In order to motivate people to be more en- with fears that might ultimately restrict organiza- gaged with their work, Catmull believes they need tional creativity. Catmull’s message to leaders who to have the power to change things. As such, he are hesitant about giving their staff the freedom to initiated the idea of Notes Day, where the entire join innovation and creative processes is clear. Pixar company gets together to figure how to op- “A leader has to be honest and vulnerable. Lot erate more efficiently. During the first the Notes of leaders believe that to be a good leader you Day, an array of different issues were discovered have to have the confidence to be right. And what as Catmull puts it, “all it did was reveal the tip of that does, is that it gets in the way if you’re not the iceberg.” However, a day which seemed diffi- right. So one needs to be vulnerable and to listen cult at first led to a greater appreciation for the because you can’t always be right.” need to understand the underlying issues at hand. For Catmull, self-awareness is therefore an im- The result of which is now a company that iden- portant asset for leaders building and leading a tifies faster and more efficiently how to improve creative culture. A leader should be aware of what its processes. is going on and also understand that there are things going on that no one can see.

NORDIC BUSINESS REPORT 2016 33 Digitalization

“We only see things from our own personal fil- However, Catmull regards VR as a technology ters and it’s important that we step back and re- that supports the movie industry. “Virtual reali- alize that our ability to see things is limited,” he ty does represent significant opportunities which concludes. will result in a lot of investment on our part. We’ve One of the elements required to foster a cre- been doing a lot of research on it and I think it has ative culture is to recruit creative people. So what major impact on our tools and the way we think is Catmull’s secret for hiring creative talent? about things.” “For me the thing that I’m looking for is potential. It’s not necessarily can they do the job, it’s do Built to last they have the potential to grow in the job,” Cat- Creativity and risk usually go hand in hand - one mull explains. He admits that this is a little more might even ask if one could exist without the oth- risky approach and you won’t always get it right, er. Failure is also often a close companion of both. but he believes that if you look for potential rather For Catmull, the simplest way to manage risk and than their particular ability of the time, in a long failure is to have the right response if things don’t run it pays off. work out. One of his insights is that “It is not the For Pixar and for Catmull himself, a prima- manager’s job to prevent risks. It is the manager’s ry goal has always been to keep the company’s job to make it safe to take them.” creative culture alive. However, it’s not always He believes that leaders shouldn’t respond so easy to sustain a creative culture and pur- negatively to mistakes. The response should be, sue growth at the same time. This is a problem ‘okay it didn’t work out, we all learnt from it, many startups face today. Catmull says startups where do we go from here.’ It’s your job to make should be paying attention to the “creeping con- it safe for people to take the risk. If they feel safe servatism that enters the culture without it being then they will respond and it is that response to challenged.” the risk that helps the organization to move along So it’s not the startup, it’s what happens after quickly.” the startup has become successful. For Catmull Catmull’s sympathetic approach to his Pixar the leader’s role is essential. “I always saw that my team is also reflected in Pixar films and their char- job and the job of leadership is to continue to look acters. There is no doubt that the approachability for the conservative elements which are inhibiting of the characters and storylines is an important people and getting in the way of a culture.” ingredient in their success. Although Catmull comes across as very hum- Virtual reality is not storytelling ble and down-to-earth, there seems to be an- Although Catmull is a creative force at the van- other side to him, and that is his burning drive guard of animated filmmaking even he has some to do something remarkable and be the first to reservations. They involve using virtual reality for do it. First, that ambition involved pushing the storytelling. Is this creeping conservatism raising boundaries of computer science; later, it meant its head, or is it something else? winning the race to make the first full-length “I think VR is a very important technology, computer-animated movie. The same kind of there are areas where it will be used and it will attitude also echoes his thoughts about Pixar’s have an effect on the way we make our movies,” future. Catmull explains. In fact, his reservation is not so “The exciting part and the challenge has been much about the technology itself, but the miscon- to keep a culture that sustains itself and will keep ceptions it may create in viewers. For him VR is on doing something that is new and original.” not the same as storytelling, they are two differ- Now, 20 years after the release of Toy Story, ent things. One an Academy Award-winning animator Catmull He cautions that one shouldn’t confuse a tech- needs to be seems thankful for this journey. “It’s been im- nology with storytelling. In particular, VR is not vulnerable mensely gratifying and the challenge has been to like filmmaking. Stories told by film do not take and to listen keep it going.” place in real time. The challenge of matching the because you Pixar is clearly not quitting any time soon and elaborate hand crafting of a story in film has yet can’t always the success of Toy Story and its sequels prove that to be solved. be right. the Pixar’s magic has not diminished.

34 NORDIC BUSINESS REPORT 2016 DESIGN: SEPPO MÄNTYLÄ

FINLAND NORWAY GERMANY SWITZERLAND AUSTRIA FRANCE ITALY SPAIN RUSSIA USA CHINA JAPAN

WWW.HONKATALOT.FI Thinkers 20 – the Brightest Business Minds in Northern Europe THINKERS

20– the Brightest Business Minds in Northern Europe

BY HANS-PETER SIEFEN & DENISE WALL

he global and European business land- National juries submitted lists of candidates, scapes have changed since Nordic Busi- following which work began on evaluating nomi- ness Report last evaluated the Nordic’s nees from all nine countries. Ttop thinkers in 2013. In spite of overall Thinkers 20 2016 reflects the juries’ perception sluggish growth in advanced economies, pioneer- that this year, entrepreneurs and business leading business advocates in innovative sectors such ers made outstanding contributions by translat- as digital have bucked the trend to register corpo- ing ideas into action and shaping their commu- rate success and shape the contemporary world. nities. Just three names from the 2013 list appear This year we reboot the Thinkers 20 and cast the on the 2016 edition: Daniel Ek (#1 in 2013), Ilk- net beyond the Nordics to encompass the Baltic ka Paananen (#7 in 2013) and Björn Kjos (#12 in states Estonia, Latvia, Lithuania and Russia. 2013). Many of the top thinkers from 2013 were edged out to become runners-up this year, in- Criteria and Results cluding shining stars such as Niklas Zennström, The essential criteria for evaluating possible can- founder of Skype, Kazaa and Atomico, who came didates included impact on industry and society, in at #2 in 2013. The fact that many of the 2013 originality and practicality of their ideas, results Thinkers 20 dropped off the 2016 ranking is a tes- achieved, social and environmental responsibili- timony to the changing landscape and the rise of ty and international outlook. Future potential was new influencers in Northern Europe – and that’s an additional consideration for the ranking. pretty good news for the region.

36 NORDIC BUSINESS REPORT 2016 Thinkers 20 – the Brightest Business Minds in Northern Europe

LATVIA: The Jury Investment and Development Agency of Latvia Andris Ozols, Director

DENMARK: Latvian Chamber of Commerce LinKS Aigars Rostovskis, President Mette Laursen, CEO KAPITALS The Confederation of Danish Enterprise Juris Kabakovs, CEO, Board Member, Terkel Riis-Jørgensen, Politisk konsulent LITHUANIA: DARE2, thinkubator & DARE2mansion JCI Lithuania Analisa Winther, Program Director Toma Grinyte˙

ESTONIA: Investors' Forum Estonian Business Angels Network Ru¯ta Skyriene˙, Executive Director Heidi Kakko, Managing Director NORWAY: Estonian Investment Agency Benify AB Märt Helmja, Area Manager Camilla Jacobsson, Project Manager

FINLAND: ManpowerGroup Solutions Norway PwC Finland Robert Johansson, National Recruitment Manager Sirpa Juutinen, Partner Aftenposten Boardman 2020 Kristin Grøntoft, Social Media Manager Susanna Rantanen, Chairman RUSSIA: ICELAND: Vedomosti NSA Ventures Anna Sherbakova, Chief editor Helga Valfells, Managing Director St. Petersburg Convention Bureau Deloitte Iceland Anna Chetvergova, General Director Haraldur Ingi Birgisson, Director of Clients & Markets SWEDEN: Íslandsstofa Dagens industri, Dagens Nyheter, Expressen Jón Ásbergsson, Managing Director Thomas Danielsson, Projektchef

PwC Sweden Johan Rippe, Partner

NORDIC BUSINESS REPORT 2016 37 Thinkers 20 – the Brightest Business Minds in Northern Europe Illustrations by Matias Teittinen Matias by Illustrations

Petter Stordalen 2000 he set up Home Invest as the parent com- 53 Norway Hotel & real estate pany for his many hotel, real estate and invest- magnate, environmentalist Home Invest ment endeavors. A dedicated environmentalist, 1 Petter Stordalen epitomizes the modern gener- Stordalen and his model-turned-physician wife ation of the world’s most accomplished entre- Gunhild Stordalen support a number of philan- preneurs who think big, and for whom social re- thropic causes through the Stordalen Founda- sponsibility and business success are inextricably tion, which focuses on environmental and social linked. The CEO and owner of investment hold- responsibility. The organization has funded tech- ing company Home Invest and chair of Scandi- nology development, renewable energy, environ- navia's largest hotel chain, Nordic Choice Hotels, mental protection and consumer behavior modi- 53 year-old Stordalen commands an empire of fication projects. In 2002 the colorful entrepreneur 170 premium hotels employing nearly 10,000 peo- made headlines by chaining himself to a bridge at ple in five countries. In 2012, influential business a UK nuclear reprocessing plant to protest the in- magazine Forbes estimated his net worth at USD adequate disposal of hazardous waste. In 2007, he 1.2 billion, generated from investments in hotels, once more engaged in personal activism when he shopping centers and other properties. Stordalen was charged with trespassing on Malmøyakalven got off to an early start building his business cre- island in Norway to protest the dumping of tox- dentials – at the tender age of 10, he worked at ic mud in the Oslofjord, an inlet in the country’s his father's grocery store in the Norwegian port southeast. Stordalen has received many business town of Porsgrunn and two years later at the age accolades, including Scandinavian Business- of 12 went on to claim the title of the region’s top man of the Year 2004, the Ernst & Young Entre- strawberry seller. Stordalen moved into property preneur of the Year Award 2010, the Grant Travel management in his early 20s before going on to Awards for Best Scandinavian Hotel chain in 2007 co-found Steen & Strom Invest, one of Norway's and 2008, and the Best Place to Work Award from largest commercial real estate firms. On the cusp 2008–2011. An avid sports buff, Stordalen has been of his mid-30s, the serial entrepreneur entered a leading sports figure in Norway and is a former the hotel business by acquiring and developing Ironman triathlete. the Scandinavian operations of Choice Hotels. In

38 NORDIC BUSINESS REPORT 2016 Thinkers 20 – the Brightest Business Minds in Northern Europe

Siemiatkowski’s story is also a classic tech sector rags-to-riches saga that has seen him go from flip- ping burgers at a local Burger King fast food outlet to sitting atop one of the world’s most innovative tech companies. The idea for an online payments facilitator failed to gain traction initially, but Siemi- atkowski and his co-founders went on to establish Klarna in 2005, surrendering a sizeable chunk of the business in exchange for a modest initial stake of 60,000 euros to get it off the ground. The company’s business proposition satisfied a yawning gap in the online transactions market, and saw it reach profit- ability in 2006, just one year after establishment. To- day, payments enabler Klarna facilitates in excess of USD 11 billion in online sales (2014), employs 1,400 Sebastian Siemiatkowski and commands 10% of the e-commerce market in 35 Sweden Co-founder & CEO Northern Europe. It accounts for 40% of all e-com- Klarna merce sales in its native Sweden. The company 2 The back story behind Sebastian Siemiatkowski’s serves 45 million customers and 65,000 merchants rise to become the CEO of Swedish e-commerce gi- in 18 markets across northern, central and eastern ant Klarna, is a narrative involving energetic young Europe as well as the US and UK. In June 2016, busi- entrepreneurs, the inevitable setbacks involved in ness news network CNBC ranked it among the top starting and expanding a business and sheer per- 10 global disruptor companies with a market valu- sistence and belief in an idea whose time had come. ation in excess of USD 2 billion.

President and CEO in 2000, in the process assum- ing control of a multinational pharma giant that employs 41,600 people in 75 countries and sells in more than 180 territories. In 2015 Novo Nordisk saw its profits rise 32% from the previous year to NOK 34.9 billion (USD 4.2 billion). The company measures its success on the basis of what it calls a triple bottom principle, which emphasizes financial, social and environmental responsibility. In 2015, the prestigious periodical Harvard Business Review named Sørsensen the year’s top-perform- ing CEO. In an interview with the publication, Sørsensen was not afraid to attribute some of the company’s success to pure luck. He also eschewed the holy grail of diversification in favor of a nar- Lars Rebien Sørsensen row focus on a single area of competence. Over 61 Denmark President & CEO the years, Sørsensen has developed strong opera- Novo Nordisk tional competencies and extensive knowledge in Lars Rebien Sørsensen’s unconventional thoughts innovation, marketing and HR. He has served on 3 on Novo Nordisk’s wildly profitable business the board of several other companies in various strategy of focusing narrowly on the company’s industries and became adjunct professor at the strengths reveal why he has been named among Faculty of Life Sciences of the University of Copen- NBR’s Top 20 Thinkers. Sørsensen joined Novo hagen in 2007. In 2005 he received the French Che- Nordisk’s Enzymes Marketing in 1982 and became valier de l'Ordre National de la Légion d'Honneur.

NORDIC BUSINESS REPORT 2016 39 Thinkers 20 – the Brightest Business Minds in Northern Europe

the IT training and database company Data Fel- lows. The firm launched its first anti-virus product in 1994 and became F-Secure in 1999. Since then, it has expanded to become a global cyber security company, with offices in 20 countries and a presence in more than 100 locations worldwide. In 2016, research firm Gartner listed F-Secure as a visionary company in its Magic Quadrant for Endpoint Protection Platforms. Siilasmaa is the company’s largest shareholder, with a stake of just under 38% in the business. He has served on the board of networks company Nokia since 2008 and became chairman in 2012. He was interim CEO from 2013 – 2014 during a stormy transition period which saw the company shed its mobile phone Risto Siilasmaa division to focus exclusively on the networks busi- 50 Finland Founder & Chairman ness. Under Siilasmaa’s steady hand, Nokia has F-Secure Corporation seen its market value rise to just over USD 30 bil- 4 A titan on the Finnish corporate scene, Risto Siilas- lion in 2016, up from roughly USD 20 billion in 2012. maa has played a central role in shaping the suc- Siilasmaa plays an active personal role in develop- cess of two of the country’s major tech companies. ing the Finnish technology sector: as a business an- He is founder and chairman of cyber security firm gel he has invested in a number of tech startups F-Secure and former CEO and Chairman of Nokia. and has served on their boards, claiming an inter- In 1988 Siilasmaa and co-founder Petri Allas set up est in “soft values” rather than financial returns.

quired by TradeDoubler and Ebay respectively. He was also previously chief executive of µTorrent, a popular peer-to-peer file sharing service and CTO of Stardoll, a fashion and entertainment company for tweens. In 2006, Ek partnered with TradeDou- bler co-founder Martin Lorentzon to establish the music streaming service Spotify. The duo launched the business in 2008 and by June 2015 had more than 75 million active users and had accumulat- ed some 30 million subscribers by March 2016. Headquartered in London, UK, the firm operates in 19 locations and employs 1,600. Spotify has suc- ceeded in harnessing contemporary technology and payment models to challenge traditional no- Daniel Ek tions of serving music lovers and helping perform- 33 Sweden Co-founder & CEO ing artists monetize their output. As of June 2015, Spotify it had paid out some USD three billion to rights 5 Spotify co-founder and CEO Daniel Ek was bitten holders. In June 2015, the company raised a hefty by the entrepreneurial bug early on. The serial tech- USD 526 million in equity financing and another preneur set up his first company in 1997 when he USD one billion on debt in early 2016. In June 2015 was just 14. Since that time, he has been involved it was valued at USD 8.5 billion. A keen aficiona- in a number of other ventures, including online do of football and the guitar, Ek devotes much of advertising company Advertigo, and the Nordic his time to maintaining a nurturing and inspiring auction company Tradera, which were later ac- working environment for Spotify employees.

40 NORDIC BUSINESS REPORT 2016 Thinkers 20 – the Brightest Business Minds in Northern Europe

Ilkka Paananen enues of USD 2.3 billion, which it con- 38 Finland Co-founder & verted into USD 924 million in profits. 6 CEO Supercell Not surprisingly, Supercell has been an Few Finnish entrepreneurs have investment magnet. In 2013, the Japa- demonstrated the power of thinking nese company Softbank paid USD 2.1 big and broad like Ilkka Paananen, billion for 51% of the game firm, up- co-founder and CEO of supernova ping ownership to 73% the following gamemaker Supercell. Established in year. In 2016, the Chinese internet gi- 2010, Supercell is one of the country’s ant Tencent Holdings picked up 84% of premier money-spinners and a model the company for USD 8.6 billion, mak- of corporate responsibility. Two 2012 ing Supercell Europe’s first decacorn, or releases, Hay Day and the perennial fa- startup valued at over USD 10 billion. vorite Clash of Clans generated stagger- Paananen is also co-founder and chair ing revenues of USD 2.5 million a day of the Me. Foundation, which funds in 2013. In 2015 Supercell posted rev- programs for marginalized youth.

Anita Krohn Traaseth Good Enough for the Bastards (Godt 44 Norway Author & CEO nok for de svina), which went on to be- Innovation Norway come a local bestseller. She was voted 7 Anita Krohn Traaseth’s impeccable one of Norway’s top young business business pedigree includes roles as talents in 2003 and ranked among the Managing Director of Hewlett-Pack- country’s top 40 leader potentials in ard’s Norwegian country operations, 2009. In 2012 she received the award CEO of commercializing strategy firm for best female ICT industry lead- Simula Innovation and strategy direc- er and was voted 2013’s Social Media tor of the international certification Personality of the Year by the media, company DNV GL. In 2014 she was marketing and communications web- appointed CEO of the government’s site Kampanje. Krohn Traaseth en- innovation and development acceler- joys a high profile on the Norwegian ator, Innovation Norway. An accom- business scene and holds many board plished communicator, Krohn Traas- memberships. eth published her first book in 2014,

Ilja Laurs ny Sungai Mobile for USD 50 million, 40 Lithuania Entrepreneur and where he remains chairman of 8 & Investor Nextury Ventures the board. In 2014 he founded Nex- A consummate serial entrepreneur, tury Ventures, a venture capital fund Ilja Laurs has established more than that bankrolls early stage startups as 10 successful business projects since well as fast growth and potentially 1999, including Lithuania’s largest high-value ideas. In 2011 Laurs was hotel reservation system lithuanian- named European Manager of the Year hotels.com, mobile payment system by the European Business Press As- MicroPay, mobile game studio Midas sociation, was nominated one of The Games and 3D professional photog- Wall Street Journal’s 25 European Tech raphy portal geoglance.com. In 2002 Leaders, and was also dubbed Tech- Laurs set up GetJar, one of the world’s nology Pioneer 2011 by the World Eco- largest independent app stores, which nomic Forum. he later sold to the Chinese compa-

NORDIC BUSINESS REPORT 2016 41 Thinkers 20 – the Brightest Business Minds in Northern Europe

Bjørn Kjos 1993 to 1996 and took over as CEO in 70 Norway Founder & CEO 2002 and has since developed the air- 9 Norwegian Airlines line to become one of the leading com- It would not be an exaggeration to mercial air carriers in the region. Nor- credit Norwegian aviator, lawyer and wegian reported revenues of USD 2.7 business magnate Bjørn Kjos with up- billion in 2015, when it transported ending the game for consumer air trav- nearly 26 million passengers and em- el in the Nordics. Kjos is the CEO and ployed just over 4,500 people. Kjos is founder of Norwegian Air Shuttle, the the airline’s largest shareholder with second-largest airline in Scandinavia, a 20% stake in the parent company and the third-largest budget airline in and his net worth has been estimated Europe. In 1993 Kjos collaborated with at USD 304 million. He has received a former employees to purchase the number of awards for his business acu- bankrupt airline Busy Bee, which they men, and the airline has been consis- later refloated as Norwegian Air Shut- tently ranked among the top carriers in tle. Kjos chaired the company from northern Europe as well as worldwide.

German Gref Fund, whose primary goal was to facili- 52 Russia President & tate repayment of Russia’s foreign debt. Chairman Sberbank Russia By the time Gref left the Ministry, the 10 Statesman and top-tier executive, since Fund had grown to over USD 130 bil- 2007 German Gref has successfully im- lion. With Gref at the helm, Sberbank plemented a series of reforms at Rus- launched a range of digital services, sian state-owned savings bank Sber- which have seen some 30 million ac- bank, resulting in improved efficiency tive users of online banking services, and a turnaround in corporate culture. 11 million active users of mobile bank- Prior to his appointment to Sberbank, ing apps and 27 million active users of Gref served for seven years as Minister its mobile bank text message service. for Trade and Economic Development In 2015 Sberbank earned USD 3.5 bil- of the Russian Federation. Together lion on roughly USD 15 billion in reve- with the Minister for Finance Aleksey nue and now employs over 330,000 em- Kudrin, Gref created the Stabilization ployees in 22 countries.

Johan Forssell traZenica as well as small compa- 45 Sweden CEO nies with interesting technology. In 11 Investor 2015, the firm recorded profits of over In 2015 Johan Forssell took over as USD two billion and the value of net President and CEO of Investor AB af- assets stood at around USD 32 bil- ter overseeing the firm’s core invest- lion. Forssell joined the company in ments, such as engineering firm Atlas 1995 and prior to his appointment as Copco and financial services insti- President and CEO, he held positions tution SEB, since 2006. Originally es- such as head of research, head of cap- tablished in 1916 by the Wallenberg ital goods and healthcare sector, ana- family of industrialists, Investor has lyst at Investor AB Core Holding and holdings in high-quality, internation- project director at Aleris. Forssell also al companies across a range of indus- holds board positions in Atlas Copco, tries, including Ericsson, Electrolux, Saab and Investor subsidiary Patricia Wärtsilä, ABB, Nasdaq, Saab and As- Industries.

42 NORDIC BUSINESS REPORT 2016 Thinkers 20 – the Brightest Business Minds in Northern Europe

Taavi Kotka on track to reach 5,000 e-residents, 37 Estonia Creator & CIO with 7,600 applications pending. Now 12 Estonian e-Residency Program known as Estonian CIO, Kotka cut his Taavi Kotka is a co-founder of the teeth in technology as owner and chief e-residency concept that has placed development officer at enterprise soft- tiny Estonia at the epicenter of the ware company Webmedia, later Nor- global tech community. In 2014, Kot- tal, where he became CEO in 2005 and ka teamed up with Ruth Annus and chairman in 2006 before leaving in Siim Sikkut to propose the goal of 10 2012 to become Deputy Secretary Gen- million e-residents by 2025 as part of a eral at the Economic Affairs and Com- competition by the Estonian Develop- munications Ministry. In 2011 Kotka ment Foundation. The rest, as they say, was named Ernst & Young’s Entrepre- is history and the project took off with neur of the Year. He was also voted Eu- the prize money awarded by the Foun- ropean CIO of the Year in 2014 and in dation. Just one year into implementa- 2016 he received Estonia’s White Star tion, the ambitious project is already III Class Order.

Mikko Wirén its beginnings as a health worker temp 44 Finland Founder & agency in 2001, Pihlajalinna expand- Chairman Pihlajalinna ed into providing specialist health 13 Credited with being the man behind a services and outsourcing services in 15-year period of rapid growth by the 2005. Since then, under Wirén’s lead private health services provider Pihla- as CEO, it has grown to become one jalinna, Mikko Wirén has become an of Finland’s leading social and health influential voice in the Finnish health services providers with medical cen- care sector. In 2015, Wirén saw the ters, occupational health centers, den- company post revenues of some EUR tal care facilities, reception centers and 213 million – up 43% over 2014 – and elder care services and a workforce of guided it through a stock exchange 4,000. In 2013 Wirén was voted Influ- listing. The firm is now on track to re- encer of the Year by the Finnish Health cord even higher turnover in 2016, es- Care sector. timated at over EUR 400 million. Since

Linda Liukas ing, provides youngsters with a basic 30 Finland Programmer & introduction to coding and program- 14 Founder Rails Girls ming using colorful illustrations and While other influencers make their engaging activities. Liukas also estab- mark by thinking big, Linda Liukas lished Rails Girls, a website designed to carved out her own space as an opin- help women learn programming fun- ion leader by thinking small. Specifi- damentals. The site became a success cally, by targeting children, particularly and spawned live workshops, with Li- girls. The 30 year-old Finnish software ukas hosting seminars for upwards of programmer and coding ambassador 10,000 women in over 200 cities world- asserted herself on the world map by wide. In 2013 the European Commis- raising the most money for a children’s sion appointed Liukas Finland’s Digital book on the crowdfunding platform Champion. In 2014 she was awarded a Kickstarter – some USD 380,000. The Finnish State Prize for Children’s Cul- book, Hello Ruby: Adventures in Cod- ture.

NORDIC BUSINESS REPORT 2016 43 Thinkers 20 – the Brightest Business Minds in Northern Europe

Pavel Durov stake in the company in 2013, the 32 Russia Digital entrepre- so-called Mark Zuckerberg of Russia 15 neur & Founder Telegram wasted no time getting to work on his Best known for launching huge- next social media project. Launched ly popular Russian social network- in mid-2013, the encrypted messaging ing site VKontakte in 2006, Pavel app Telegram went on to accumulate Durov is one of Northern Europe’s upwards of 100 million active month- undisputed young Turks of entrepre- ly users by early 2016. The company neurship. Durov developed VK as it said that the service was signing up became known, to be the largest Eu- 350,000 new users every day and de- ropean-based network with some 360 livering 15 billion messages daily. Ear- million accounts. Available in 76 lan- lier in 2016, Durov dismissed conjec- guages, VK is very popular with Rus- ture that Google had pitched a USD sians and is the most-visited site in one billion offer for the rapidly-grow- the country. After selling off his 12% ing messaging app.

Uldis Pīlēns ed Kingdom and employs more than 59 Latvia Chairman 1,300 employees across 40 enterpris- UPB Holdings es and production units. UPB Holding 16 Uldis Pı¯le¯ns is a prominent architect has been recognized with the Ruban and entrepreneur who, as founder d’Honneur award (in 2015 and 2011) and chairman of UPB Holdings, grew in the European Business Awards. The the company from a small architec- firm also received the Champion of Ex- tural bureau into a major diversified ports prize in the annual Latvia’s Ex- pan-European industrial group in 25 port and Innovation Awards in 2013. years. During his tenure, Pı¯le¯ns has In 2015 the Latvian Employers’ Con- expanded the company into busi- federation named Pı¯le¯ns Entrepreneur ness areas such as engineering, pro- of the Year for his contribution to the duction, construction and sales. The development of the local business en- group now includes subsidiaries in vironment. Sweden, Norway, Denmark, Iceland, Germany, Switzerland and the Unit-

Gunn Wærstad Executive up to 2016. She has held a 61 Norway Chairman number of other senior executive po- 17 Telenor sitions in the banking and insurance A business heavyweight in her native sectors, including holding the role of Norway, Gunn Wærstad was appoint- CEO of SpareBank 1 Gruppen and the ed chair of Telenor in early 2016. One SpareBank 1 Alliansen, Group Exec- of the leading mobile operators in the utive Vice President of the country’s world, Telenor Group has 208 million largest financial services group DNB mobile subscriptions and operations in and CEO of Vital Forsikring, the larg- 13 markets. Revenues in 2015 topped est Norwegian life and pension insur- USD 15 billion. Prior to Telenor, Wærs- ance company. Wærsted is also Chair tad served as Executive Vice President of the Board of Petoro, the state-owned and Group Executive Management portfolio owner of petroleum and nat- team member with Nordea Bank and ural gas exploration and production li- was the institution’s Country Senior censes.

44 NORDIC BUSINESS REPORT 2016 Thinkers 20 – the Brightest Business Minds in Northern Europe

Vilborg Einarsdottir landic Innovation Award from the In- Iceland Founder novation Center of Iceland and in 2013 18 InfoMentor it was named one of EdTech’s top three Armed with a background in education, most innovative e-learning companies management and strategy, Vilborg Ein- in Europe. Einarsdottir is a sought-after arsdottir co-founded e-learning com- university lecturer in Iceland and is al- pany InfoMentor in 1990. Since that so a popular speaker on the educational time she has successfully transformed circuit. In 2012 the Icelandic President the firm into a leading provider of on- conferred on her the Order of the Fal- line and mobile educational solutions. con and she was named Business Wom- InfoMentor is used in more than 1,000 an of the Year 2010 by the Icelandic As- schools across the UK, Sweden, Iceland, sociation of Women Entrepreneurs. In Switzerland and Germany and some 2009, Swedish Crown Princess Victoria 80,000 users log into its systems daily. awarded her the title of Female Entre- In 2011 the company received the Ice- preneurship Ambassador.

Sten Tamkivi force by helping match talent with 38 Estonia Founder & CEO startup-friendly cities worldwide. Tele- Teleport port has so far received USD 2.5 million 19 An alumnus of the founding team that in first round investment from nine in- introduced the game-changing service vestors, including Skype cofounder Skype, Sten Tamkivi has been a tech Jaan Tallinn. A former adviser to Esto- entrepreneur since 1996. After trying nian President Toomas Hendrik Ilves, his hand at a few entrepreneurial ven- Tamkivi has won a number of national tures, he joined Skype as an early exec- awards. In October 2015, Teleport’s re- utive, ran the original R&D office, and mote meeting financial planner Tele- held several global product leadership port Flock emerged one of the winners roles for over eight years. In 2014, Tam- of the World Summit Awards in the kivi turned his hand to entrepreneur- Culture & Tourism category. In June ship once more, this time co-founding this year, the startup took home the Teleport, a service that supports an in- Global Champion title at the WSA In- creasingly nomadic global tech work- novation Congress in Singapore.

Kristo Käärmann & service is available in 59 countries and Taavet Hinrikus more than 500 currencies, and moves 20 35 & 34 Estonia Founders nearly USD 600 million monthly, sav- TransferWise ing more than USD 28 million in hid- Taavet Hinrikus and Kristo Käärmann den fees. With Hinrikus’ Skype pedigree believe that money is meant to flow as the Estonian firm’s first employee, freely – a radical notion in a world TransferWise has attracted many in- where large financial institutions con- vestors – as of January 2015, it had col- trol currency flows and rates. The dis- lected USD 91 million in financing and ruptive duo teamed up to co-found its market valuation is estimated at TransferWise in 2011 – turning a cen- USD 1.1 billion. In 2015, business news turies-old industry on its head in the network CNBC ranked the Estonian process. The company provides inter- unicorn at number 8 on its 2015 Dis- national cash transfers at current ex- ruptor 50 ranking. change rates with no hidden costs. The

NORDIC BUSINESS REPORT 2016 45 Digitalization Tiina Kälkäinen

SaaS Isn't New Anymore, And It's Here to Stay

BY DEVIN KATE POPE

oftware as a Service appli- tages of using and running SaaS appli- and what your customers are doing cations and businesses are cations. One thing that’s for certain: with it.” popping up in record fash- SaaS isn’t going anywhere. Wassenaar gives the example of Sion. Most of us use at least a how most people don’t go to the bank few SaaS apps, but it’s not just person- Finding a better way to do their banking anymore; they use al – companies are embracing SaaS be- New Relic helps software developers, the mobile app. So now the most im- cause it lets them spend time on other IT operations, and the executives with- portant things are if the app reacted things. Today instead of peering in at in companies. New Relic is “specifical- quickly and was easy to navigate, not if SaaS companies from the outside, it’s ly looking to be the best first place to the teller line is long. time to dive deeper. Yvonne Wasse- go to understand what your software “Those are the things that your soft- naar, CIO at New Relic, and Des Tray- is doing for your business,” Wassenaar ware can now tell you and those are the nor, Co-Founder of Intercom, know says. “New Relic helps you understand people we serve,” Wassenaar says. “The SaaS like it’s their hometown. They will the performance of your software. It people who are building those applica- pinpoint the advantages and disadvan- helps you understand how it’s running tions, the ones who are operating them,

46 NORDIC BUSINESS REPORT 2016 Digitalization

and the executives who want to know what people are doing with them.” And New Relic can show exactly that. There has to be a better way. At least, that’s what the team at Intercom said at the very beginning. Des Traynor says that Intercom’s mission today has the same spirit. “Intercom evolved from this core idea; which is talking to your customers is so important it should be simple,” Traynor says. “Today we say our mission is to make internet business personal.”

Customers are people, too People matter. Even with the most de- tailed metrics in the world, dialogue matters. Traynor says that at the core of Intercom is the belief that businesses need to treat their customers like ordi- nary people and “stop doing the usual thing which is treating them like data go?” Notice that this doesn’t have any- this shift does is it genuinely democra- points in a database.” thing to do with a company thinking of tizes innovation.” Wassenaar points out that some- a cool feature and making it because For business users, SaaS can be the one could be using a SaaS application, they like it – the feature has to serve perfect answer to the pressure to act but be unhappy with it. She says this the customer. Some companies try to faster than ever to adopt technology means that companies have to strike a serve customers by creating as many and figure out what business model balance between metrics and human features to solve as many problems as brings the best results for customers. dialogue to guide the customer’s ex- possible. Delegate out some work to SaaS apps perience. In the end, Wassenaar says “This means they’re spread so thin and focus on other things. Wassenaar “people vote with their feet.” Meaning, they struggle to deliver value for any says that business users are getting to what’s the annual recurring revenue? use case, and the product gets over this point because the SaaS market has How many people are staying? complicated,” Traynor says. A business matured enough for people to trust it. When you or I sign up for a SaaS or app can’t solve every problem. It’s ”There was a period of time when app, it’s usually low risk. Try it out, see time to streamline for success. people were afraid of ‘renting’ software if it’s a good fit, and move on if it’s not but now it’s common,” Wassenaar says. to our liking. This excellent set up for When tiny and efficient teams We are living in a “renaissance of the customer is a challenge for the SaaS win big, we all win big software,” Traynor says, and it is almost company – a challenge that puts cus- Speaking of success, did you know undeniably great. Yes, SaaS brings its tomer service and experience at the that when Instagram was acquired it bundle of quirks, but the support it top of the ever-lengthening priority list. had 13 employees? And at WhatsApp, provides for people to innovate far out- “Because people are ‘renting’ the there were only 55 employees at the weighs the challenges. SaaS as we’re software, it’s easier for them to leave,” time of acquisition? Wildly loved and getting to know it means that inno- Wassenaar says. “So, you have to earn used companies can now be built with vation can flourish wherever the idea their business every day.” a small team. lives. Whether it’s a few business wom- Traynor echoes this when he says “The proliferation of cloud ser- en in Helsinki, me in my small town that before a company adds a new vices…means that small teams can set apartment, or the stereotypical Sili- feature to their app, they need to ask up shop and afford to scale without con Valley startup, we can all use the themselves, “Does this feature help growing a massive headcount,” Traynor same SaaS tools to build our ideas into the user get to where they need to says. “I think it’s a blessing. I think what a product.

NORDIC BUSINESS REPORT 2016 47 Digitalization

Pia Vemmelund Q&A Managing Director, momondo

The travel search site changes all the time, giving you new dling data in different ways. Log in is Momondo already operates opportunities to turn your creativity one thing that helps us a lot. Knowing in 35 markets worldwide and innovation into useful insights for people's preferences and search history and with their internal users. Like many companies, our rev- is one of the areas where we can really resources growing rapidly enue is higher for the website than it see it having an impact. is for mobile. However, a lot of users they are optimistic about touch upon our app during their cus- NBR: In the industry, are there any un- their prospects for the tomer journey, which is why we have derlying ideas or concepts that are being future. Managing Director decided to improve our app product. underutilized/undervalued? Pia Vemmelund has passed When we say we want to be the best, PV: That's a tough question. Again, on some insights into their it has to be across all platforms. From I think it has very much to do with mo- strategy, as well as her a user perspective, you use all different bile. There must be a reason why peo- perspective on digitalization devices depending on where you are ple change their mobile device and go in the industry. and what situation you're in. to the website to actually end their transactions. There must be ways we BY ANDREW SCHOLFIELD NBR: How has Momondo transitioned to can improve the process and make it mobile since you’ve been with them? easier to make the booking. Some of Nordic Business Report: What is Mo- PV: We have seen an increase in our competitors are doing what we mondo’s positioning and competitive ad- app usage of 89 % year over year in call ‘assisted booking’. I would like us vantage? Q1, with more people actually finish- to find a way to take friction out of mo- Pia Vemmelund: We've been focusing their booking on mobile. After a bile use, but it's difficult as meta-search ing on becoming a global player. We lengthy internal discussion it was pret- is reliant on its partners. How do you see consolidation is taking place in the ty clear that we wanted flights and ho- find a setup where thousands of part- industry and it becomes harder to on- tels in the same app. It's easier for us to ners all agree a way that makes the pro- ly be a local player. Critically our core promote one app towards the end-us- cess smooth? From a user perspective product is strong (that is finding cheap er. Our recently launched version of the that would create the greatest benefit. flights and cheap hotels). However, at iOS app improves navigation, making the same time we put a lot of energy it seamless. Today, there’s less friction NBR: Can you tell us more about your into inspiring people, into creating in- due to mobile optimized sites from all branding? spirational tools, such as Trip Finder. online travel agencies, which was not PV: From the start we decided that We also have a city guide app called the case a year or two ago. Places is a product and brand were really import- Places where you can search based on separate app but that’s because it’s a ant. However, you have to have some- your mood. Another strength of ours is more inspirational tool. With more thing that drives you. We truly believe taking data and turning it into useful people looking for where to go than that travelling helps open up the world. information such as the feature Flight searching for specific destinations, this We know there's a clear correlation be- Insight. We were the first to launch is a growth market we want to inspire tween trust in other people and trav- route specific flight variability infor- and take part of in the future. elling. A clear vision; a clear purpose mation, showing you how likely it is for makes it easier to mould a team for the price to go up the closer you get to NBR: How difficult is it to convert big da- the product you want to build. Be clear departure. In general, though, it’s the ta into revenue? on where you want to be the best, and playful way we present data that adds PV: I think we all agree that the when your product is the best there to the user experience. more personalized we can make a prod- will always be a demand for it. uct; the more the relevant data we pres- NBR: What are the biggest shifts you've ent to the user, the more likely they are noticed in online travel? to convert. So, we try to make it as per- PV: For all digital industries, the sonalized as possible. The consequence speed is just amazing. Technology is it requires you to be capable of han-

48 NORDIC BUSINESS REPORT 2016 Digitalization

NORDIC BUSINESS REPORT 2016 49 Digitalization

Anita Krohn Traaseth Q&A CEO, Innovation Norway

Norway is really putting its most important [activities] are our fi- NBR: Are there any other notable digital money where its mouth is nancing of clusters and centers for ex- tech examples? when it comes to innovation cellence. AKT: Lefdal Mine Datacenter is con- with NOK 6.1 billion in fund- structing a data centre with a potential ing being made available NBR: How are you transitioning away size that could make it unique in the from a petroleum-based economy? world. Given the natural advantages in to Norwegian businesses AKT: Norway needs to build up Sogn og Fjordane it will be among the and industries. Anita Krohn new business opportunities in order to greenest and most energy efficient da- Traaseth, now the CEO of maintain today’s economy and pros- ta centres ever developed. Signicat AS Innovation Norway, explains perity. We believe the oil industry itself, delivers comprehensive services with- how the country is building and the people associated with it, will in electronic identification and has the a future away from the be crucial for this transformation. Their wind in its sails thanks to the growing reliance on oil money. expertise, technology and internation- international demand for cybersecuri- al networks will continue pushing for ty. TAG Sensors’ core activities revolve BY ANDREW SCHOLFIELD development and innovation in both around a system for a continuous re- With 700+ employees in over 35 offic- established and new industries. Sus- frigeration monitoring and control es worldwide, Innovation Norway (IN) tainability is an important part of IN’s chain using labels. These contain sen- is the Norwegian Government’s “most strategy, and [all] applicants for our sors in the form of a computer chip that important instrument for innovation”, grants must now account for the en- can be read using a smart phone. explains Anita. IN works closely with vironmental and social impact of their the Research Council of Norway who projects. We believe there are huge NBR: What is your assessment of the implement R&D projects, but has a market opportunities related to climate Norwegian startup ecosystem? major steering role through the in- change, population growth, urbaniza- AKT: The interest around the Nor- stigation of the Dream Commitment, tion, the need for safe food, clean water, wegian startup ecosystem has ex- a collective ideation and discussion welfare technology, energy and the like. ploded the last couple of years, much between businesses and community Norway is the country with the highest due to several incubators, communi- leaders about the aspirations for Nor- density of electrical cars – despite our ties [and] initiatives like Start Up Ex- wegian society and industry. Through important oil industry. This proves that treme. Our belief is that there has been the Dream Commitment objectives and the shift is possible. a good startup culture for a long time a focus on areas in which Norway ex- – but with less known companies. I cels in “knowledge, competence and/ NBR: How is Norway harnessing the call us the ’Tacit Innovation Nation.’ or natural resources”, Norway is tar- power of digitalization? We see a critical mass of new compa- geting the “intercept between [six] dis- AKT: In 2016 the Government nies ready to expand within the areas ciplines and sectors: the ocean space, launched “The Digital Agenda for Nor- of cleantech, edtech, fintech and med- clean energy, bioeconomy, health & wel- way”. The agenda… describes how ICT tech. They are growing fast, together, fare, smart societies, and creative busi- can be used to renew, simplify and im- and they are clustering and cooperat- nesses & tourism. prove the public sector and forecasts ing like the traditional industries have increased efforts in this area. It deals done. This I believe is a key to success. Nordic Business Report: How is IN de- with how ICT can facilitate innovation To develop more successful start-ups, livering the ‘Dream’ into reality? and competitiveness in business and we also need more global oriented en- Anita Krohn Traaseth: We are strong presents a national plan for electronic trepreneurs. The services and instru- advocates for incubators, organizing communications. Although not in the ments offered byIN are intended to events, trainings and recruitment ac- lead, Norway is a forerunner in some complement this ecosystem. tivities. Innovation Norway has [been fields already. Many countries envy our involved] in creating “power couples”, banking system and our fiscal solution, i.e. medium to large companies work- Altinn. ing closely with startups. Maybe the

50 NORDIC BUSINESS REPORT 2016 NORDIC BUSINESS REPORT Digitalization 2016

Agnete Brun Taavi Kotka, CIO of the Republic of Estonia “Estonia is the ﬁrst country to have a state-run app store.”

Photo: Kai Kuusisto / Slush COUNTRY AS A SERVICE – ESTONIA’S NEW MODEL

In May, Manu Sporny became the 10,000th e-resident of Estonia. Sporny, the CEO of a US digital payments company, has never set foot in Estonia. However, he heard about the country’s e-Residency program and decided Estonia was an obvious choice for his company’s European headquarters.

People like Sporny are why Estonia online voting makes it easy to participate launched e-Residency in December 2014. in elections. Benefits of e-Residency The program allows anyone in the world One essential component of digital for Entrepreneurs: to apply for a digital identity, which will let society is a secure digital identity, which » Establish a company online within a day them: establish and run a location inde- promotes accountability and makes it eas- » Administer the company online from anywhere pendent business online, access the EU ier to protect individuals’ identities. In 2002, in the world market, open a bank account, use in- Estonia started issuing residents a man- » Open a bank account, conduct e-banking ternational payment service providers, datory ID-card with a chip that empowers » Access international payment service providers declare taxes, and sign documents and them to categorically identify themselves » Sign documents digitally contracts remotely. and verify legal transactions and documents » Declare taxes online Just as private companies rely on new through a legally binding digital signature. clients to promote profits, the state must With the new digital identity system, for Estonian companies. When an e-resi- retain citizens and add new residents and the state could serve its residents as well as dent establishes a company, it means that businesses to improve its economic condi- the whole Estonian diaspora and it seemed the company will likely start using some tion. Global competition among states is logical to offer its e-services to people all Estonian services (such as those offered growing, however, and doing the same-old, over the world. by bankers, accountants, auditors and same-old won’t get results. lawyers). As more clients are created for Estonia has a grand total of 1.3 million What does these Estonian companies, their growth inhabitants living in not-the-most-desir- “Country as a Service” mean? potential increases, along with the growth able climate, located at the same latitude With globalization, skilled workers and potential of the Estonian economy. as Alaska; on top of its undesirable climate, businesspeople offer their services across If states fail to redesign and simplify it lacks the well-funded social services of national borders, regardless of their phys- the machinery of bureaucracy and make it the other Nordics. On the surface, it would ical location. A survey by Intuit estimates location-independent, there will be an op- seem that Estonia has no chance of growth that by 2020, 40 percent of US workers will portunity for countries that can offer such in this situation, but if you take a closer pursue this type of work. services across borders. look, it does. These entrepreneurs are looking for Estonia has learned that it’s incred- After regaining statehood from the the simplest way to create and main- ibly important in a small state to serve Soviet Union in 1991, the Estonian pri- tain a legal, global identity as an outlet primarily small and micro businesses. In vate and public sectors saw the need for for their global offerings. This is exactly order to sustain our nation in this way, we what Estonia offers— must automate and digitize processes to Estonia has one of the most robust national a location-independ- scale. Estonia’s model, for instance, is lo- digital infrastructures in the world. ent, hassle-free and ful- cation-independent, making it simple to a new method of government. Together, ly-digital economic and financial envi- scale successfully: Estonia hopes to attract they decided to transform Estonia into ronment where entrepreneurs can run at least 10 million e-residents by 2025. a nation based on digital solutions and their own company globally. e-services. 25 years later, Estonia has one Apply for e-Residency at e-resident.gov.ee of the most robust national digital infra- So how does Estonia benefit? or on-site at Nordic Business Forum structures in the world. Digital signatures The more people and companies that on October 6-7, 2016 in Helsinki. make signing documents effortless. Filing are engaged with the Estonian business » e-resident.gov.ee taxes only takes a few minutes online and environment, the more clients there are

ADVERTISEMENT Digitalization Tiina Kälkäinen

Running Past the Internet of Things BY MARIA HOLM

There is a sense of urgency surrounding the discussion on the digital transformation of industry and the so-called “next industrial revolution”. Consultants, journalists and entrepreneurs emphatically announce that a sudden transformation will occur when it comes to new products and solutions in the emerging landscape of Internet of Things, which is even faster than previous disruptions.

he next revolution, building on the digi- where an essential part is characterized as the In- tal revolution that emerged in the 50s, is ternet of Things (IoT). defined as the combination of contem- IoT implies that a massive amount of “things” Tporary automation; exchange of data around us, such as furniture, houses, clothes, bod- and manufacturing technologies. Klaus Schwab, ies, plants, and cars will be connected to sensors, founder of the World Economic Forum, has char- actuators, software, services, platforms, and net- acterized it as “a fusion of technologies that is works, which provides new functionalities and blurring the lines between the physical, digital, services. The idea with IoT is to conflate things and biological spheres.” Spokesmen in the media with computers and thus revolutionize both. and at prestigious talks are pushing for a sense of The sense of urgency around IoT seems to have urgency when it comes to this revolution. A rev- influenced incubators and investors as well. Just olution caused by the development of products a few years back the investors were reluctant to

NORDIC BUSINESS REPORT 2016 53 Digitalization

invest in hardware startups due to the high risk The philosophy and principles of open-source with long lead times and cost of manufacturing software design have been applied also in hard- these products. This is no longer the case and in- ware projects. A study by MIT media lab showed vestments in hardware innovations are trending. that open-source hardware development was It seems reasonable to prepare for a swift and typically performed as small-scale projects. The drastic revolution. Agile software development, projects encountered difficulties in development, as well as rapid hardware manufacturing with such as components not being available in a given 3D printing, supported by a “Do It Yourself (DIY)” country or material being out of stock. Other dif- movement have drastically contributed to the the ferences that the study pointed to were the com- speed of technological development. Startups can plication of sharing components, the investment move ever faster based on their competences and required for prototyping, and the lack of mature insights on how to take advantage of new market software tools for collaboration. The study points strategies. The progress of services and applica- to a number of challenges facing industry in the tions was made possible with the emergence of transformation of becoming digital. The poten- iOS and Android smartphones. This resulted in the tial for those problems to explode when larger preceding mobile revolution, including swift acces- companies engage in IoT activities are evident. sibility to the market that pushed slow telecommu- Professor Bo Dahlbom’s example of a company nications operators to even introduce flat rate. facing dramatic challenges is IKEA. It is “…an in- At the same time there are factors present industry company and not a digital company”, and dicating that the change driven by IoT will be less yet IKEA is expected to be abruptly revolution- urgent and revolutionary. A combination of abun- ized by IoT. In this context, industry companies dant physical objects with computing technolo- will be faced with a new set of requirements re- gy is demanding. Every node in IoT is complex. It garding the organization, its resources and com- brings together the digital with traditional manu- petences. facturing technology. Underlining the call for ur- The observation from this line of reasoning is gent action, there is a prevailing belief that hard- that some things develop fast, like software, while ware can be developed at the same fast pace as we others will have a slower pace. If the challenges have recently seen with software. Such a transfor- in combining traditional manufacturing with ag- mation, with an expected pace of recent digital ile programming will lead to a slower innovation transformations, will be a huge challenge for es- pace than is expected, where does this lead us? tablished manufacturers of “things”. The reflection to be made is that the sense of ur- Since the beginning of the industrial revolu- gency can have consequences for innovation in tion the process of manufacturing physical objects industry. have evolved from using tools to building tools, to During the last decade we have seen compa- big scale assembly line production organized in nies downsize their own internal research and a “Fordism” style, until more recent operational innovation development. Many are the telecom management of production in industry with sys- and IT-companies that have closed down whole tems such at the Toyota model, the Kanban sys- departments to become slimmer, and instead tem, JIT and so on. Manufacturing techniques and moved towards “open innovation”, which in ma- operational management that over the years have ny cases means collaborating with or investing in made production faster and more efficient, but startups. Nokia and TeliaSonera are examples of not as quickly as software production. companies that have drastically downsized their The difference in speed of production be- research organizations where TeliaSonera moved comes evident when open source software design from 600 researchers to an organization for inno- is compared to open-source hardware design. vation management run by a handful of people. The open-source software movement produces This development indicates that innovation is on a big scale through voluntary development expected to be fast and, to a lesser extent, made projects, which engage highly competent people within the firms. Instead, many companies seek working together across nations. It has resulted new services and products to complement their in global success stories like Linux, Android, and offering to customers through collaboration and Wikipedia. acquisitions of startups.

54 NORDIC BUSINESS REPORT 2016 Digitalization

At the same time, the ‘Things’ in the Internet of Things are often made in China and other low la- bor cost countries by a single manufacturer serving many customers. Manufacturing is an industry that for centuries have worked to lower the costs and make production more adaptive and efficient such as by minimum requirements of batch sizes, reducing lead and delivery time. A number of Swedish start-ups in the IoT area such as HiNa- tion, Mutewatch and, Movinto Fun all faced the challenges of having to adapt to the these ‘slower production requirements of the ‘thing’, resulting in long waiting times for delivery, lock-in of quan- tity of production and so forth. The traditional manufacturing industry model has long experience of producing ‘things’ and has learnt that production of physical products requires time. Therefore, they do it in a careful and planned way. The traditional model starts with a Tiina Kälkäinen market analysis to identify the gaps and needs of the customer. The customers are quite often existing customers rather than new users. For one, ate different forms and thus still provide variety it is not at all apparent that the customers know to the consumer. what they want or need and in many cases they Also, IT companies might end up being more will not be prepared to make investments in new selective about who they work with, focusing on products or technology. those manufacturers who can provide speed, flex- Although the introduction of IoT is unlikely ibility and variation in production. These more ag- to lead to the same sort of radical transformation ile and responsive manufacturers would exploit as the mobile Internet has given us, it would be a this first-mover advantage and monopolize the shame if the problems outlined in this piece be- market. The downside again is that less variety came obstinate barriers to the realization of what and less competition might affect the value that could be achieved. What is required is to acknowl- is delivered to the customer. edge that the pace of IT development will always Warning signs for obdurate manufacturers outstrip the physical limitations of manufactur- can be seen in the car industry where the pace of ing. The computer industry’s demand for speed digital services has leapfrogged their endeavors. can’t change the laws of physics. It should also be Despite efforts to embed new services, such as remembered that any possible improvement in navigation tools into a car’s onboard system, the manufacturing efficiency or incorporation of new speed of development of such features in mobile technology is a potential for competitive advan- phones have made these additions seem dated be- tage and as such will be seized upon by manufac- fore they’ve even arrived. turing firms whenever possible. Moving forward, it is the actor who under- In addition, we don’t have to search hard for stands the whole process and engages with digital examples of ways in which this chasm of prog- opportunities will undoubtedly benefit from the ress can be bridged. For example, a reduction in advantages that are inherent within the IoT. What variety would better allow for the creation of ex- is not yet evident is whether the pioneers in this changeable and modular digital components and regard will come from manufacturers who have more standardization for IoT technology. Soft- adapted, or from IT companies that have expand- ware will have an increased role in design and ed their market ambitions. In order for there to be there will be more focus put on the interface and more clarity on where the future successes in the the design of surfaces. So long as physical prod- IoT will be orientated, there needs to be more case ucts are modular there would still be room to cre- examples to illustrate what is and isn’t possible.

NORDIC BUSINESS REPORT 2016 55 T platform model has. platform model in practicallynance industries all quickly as the as to domi rise business model new a single to see and strategy. ofworld business models It rare is in the happened has suit. noteworthy Something Bezos equivalent if as the it is of of GDP the Canada, together with their CEOs, aretogether CEOs, with quickly their following network marketplace lodging and Uber AirBnB, transportation Alibaba, giant eCommerce nese of and post in it. just us Chi text, shop, search, erberg Digitalization 56 BY of Platforms The Power Tiina Kälkääinen NORDIC BUSINESS REPORT TUOMAS LIISANANTTI TUOMAS , had taken over the world and the rest the and world taken had the over Larry Page Larry in terms of marketin their terms capitalization, $1,800,000,000,000 at combined ering Apple, and Amazon, hov Google, book, Face four big platformhe companies, , Tim Cook Tim

20162015 and and Mark Zuck Mark Je ff - - - - - creates no content. Alibaba, the most valuable valuable most the Alibaba, content. no creates world’s the book, owner, media most popular largest company, taxi Face vehicles. no owns famous TechCrunch article,”Uber, world’s the estate.” largest provider, accommodation real no owns retailer, inventory. no has And Airbnb, world’s the As stated byAs Tom Goodwin

, in the now- , in the - Digitalization

other people are paying for the crops. It’s sort of the ultimate business model where your content providers don’t charge you anything, which makes it massively profitable. You’ve never seen companies built on the backs of their consumers the way these are.” If most markets previously created value and transferred it ‘linearly’ through a production chain that was put in place to deliver the product or service, now the platform structure facilitates a large number of connections that enable value to be created, co-created, exchanged, and consumed in various ways. A typical trait of many successful platform businesses is that the platform creates value in ways that even the creator of the platform What has changed is that information tech- couldn’t foresee. nology has profoundly reduced the need to own The network effect refers to the impact that physical infrastructure and assets. The majority of the number of users of a platform has on the val- the most prosperous technology companies of to- ue created for each user. A classic example of day run platform-based businesses. network effects is the telephone. The greater the According to Sangeet Paul Choudary, Mar- number of phone users, the more valuable the shall W. Van Alstyne, and Geoffrey G. Parker, telephone is for each owner. The same type of pos- the authors of Platform Revolution, a platform is itive network effect is considered the main source ”a business based on enabling value-creating in- of value creation and competitive advantage for teractions between external producers and con- platform businesses. sumers”. It provides an open, participative infra- However, this is not to suggest that the plat- structure for interactions and sets governance form-based business model doesn’t have any conditions to ”consummate matches among weaknesses. Even the established platform busi- users and facilitate the exchange of goods, ser- nesses that have scaled up rapidly are constantly vices, or social currency, thereby enabling value under stress due to network effects. creation for all participants”. “The reasons they were able to scale so fast The Internet was supposed to kill middlemen, makes them very vulnerable to other companies but instead, being the middleman has proven to that can scale up fast. Technology companies typi- be very lucrative. cally age in dog-years,” Galloway points out. Even if more traditional companies such as the The Uber of Everything consumer goods behemoths Unilever and Procter Since 2000, the winds of change have already & Gamble are not able to grow as quickly, be as wiped out 52% of the Fortune 500 companies, profitable in the near or medium term, or create making room for platform technology compa- shareholder returns as lucrative as Facebook or nies whose revenues and shares have soared to Google, the established physical nature of these new heights. Facebook, Amazon, and Google have businesses has some advantages that can help worked their way up to top the highest valued them outlive many technology companies. The companies list extremely fast. countermove from the current digital behemoths So, what makes the platform-based business is, ironically, to get back to the world of physical model so powerful? things. Scott Galloway, a clinical professor of market- “The smart ones, like Amazon, are building ing at NYU Stern and the founder of the intelli- Other people analog barriers of entry. They used the Internet, gence firm L2 Inc, explains. are creat- cloud-based computing, and network effects to “Effectively, other people are creating their ing their build businesses that scale fast, but they then product free of charge. Not only do you have net- product free used the cheap capital to go and invest in things work effects, but you have this cash crop where of charge. like warehouses,” Galloway says.

NORDIC BUSINESS REPORT 2016 57 Digitalization Tiina Kälkääinen

Apple, the only one of the big four to have suc- The smart to excessive complexity and bad user experience ceeded in the hardware business, has also gone ones, like on the other. the same way by investing in hundreds of Apple Amazon, stores in 18 countries. are build- The G & The F Another kind of network effect-related risk ing analog With 1.6 billion monthly active users going to that has resulted in the downfall of many of the barriers of Facebook for news, photos, video, and messag- platform company hits of the 21st century, is the entry. ing, Facebook, described by Galloway as the most so-called negative network effect. The sub-type, successful thing in the history of time, has fairly described by Choudary, Van Alstyne and Park- quickly started to control a mind-boggling portion er as the ’negative cross-side effect’ is especially of all internet traffic. the reason why many of the mighty have fallen. “Facebook is now 25% of the time spent on the “Cross-side effects arise when either consumers Internet, so it’s like technically Facebook is the In- or producers gain or lose based on the number of ternet, and the Internet is just the IP-department users on the opposite side of the platform,” the au- – the underlying technology.” thors write. Losing a productive user on one side The competition for consumers’ time spent can quickly result in losing many more on the oth- online is fierce, and Facebook is not the only er side of the two-sided market. Or gain too many player that wants to be the interface via which users on one side and the imbalance might lead we interact most on our mobile phones. All the

58 NORDIC BUSINESS REPORT 2016 Digitalization

platform giants are slowly reaching to each oth- bus. Name any organization that is known for er’s territory and, to some extent, being the oper- having very smart people and you can add them ating system on our mobile phone seems to be- all up, but it does not add up to the candlepower come the celebrity deathmatch. Apple can, to a and intellect that Google has assembled,” Gallo- certain extent, control the hardware and decide way says. what goes on the device. And Google is there with Android. Wrong side of the coin “They are trying to figure out who has custo- When companies are growing 20 to 40 percent dy of the consumer via their mobile phone,” says a year in a 2% growth economy, there’s usually Galloway. someone on the wrong side of that coin. Experts When asked about betting on either Facebook across the board have noted that every time these or Google, Galloway picked Facebook. For two pri- companies increase their market share and rev- mary reasons. enues, job destruction results on the other end. “They are allowed to link data to specific iden- Even if, companies doing more with less is not tities.” What Galloway means is that because of necessarily a bad thing given that unemployed the open nature of the Facebook, we don’t seem workers have found other ways to make a living to mind if Facebook collects data on our specif- in more productive areas, this time is notably dif- ic actions and links it to our specific identity. An ferent. asset easily monetized by selling the data to ad- “What you have is a great uncoupling when vertisers. technology became the growth engine, because On the other hand, people are not as comfort- technology is quite frankly destroying mid- able linking their search queries with their names dle-class jobs faster than we can recreate them. and identities. For obvious reasons, we put a lot The pace of job destruction, unfortunately, has of strange things into the search query box. “As a outpaced the rate of job creation in other indus- result, Google can cluster groups and link data to tries,” Galloway analyzes. specific groups, but they can’t target as richly as Though the employee count of all the biggest Facebook,” Galloway sums up. platform technology mammoths is unprecedent- The other advantage Facebook has is mobile. ed compared to their revenues and market capi- “I would call mobile neutral for Google. Mobile talizations, Uber is facing by far the most dissent is creating more time on screens, more searches, among people concerned about negative employ- which is good for Google, but 80% of the time on ment effects. Galloway has a simple explanation a mobile phone is spent in an app and not on a for why Uber has become the poster child for job browser, which is bad for Google. A lot of apps are destruction. controlled by the host company who doesn’t nec- “It’s a very identifiable group that Uber is put- essarily have an interest in driving more Google ting out of work, whereas Amazon is putting a search revenue. There’s also less screen real estate bunch of different people from different indus- to serve AdWords ads. So, while on one hand mo- tries out of business: merchants, security guards, bile is good for Google, it’s also a potential threat,” cashiers, and real-estate people who build retail. Galloway explains. They are not as coordinated and don’t speak as “For Facebook, mobile has been a net positive. loudly with one voice.” 83% of Facebook’s revenue now comes from mo- The impact of the world of platforms is much bile. It’s largely a visual platform with some text easier to recognize when getting off a plane at an wrapped around it, so mobile does not impair the airport and seeing a line of 100 taxis and no cus- process. Google grew 18% last year, and Facebook They are try- tomers – it’s right in your face. The growing domi- grew 43%, so Facebook has the upper hand right ing to figure nance of more with less is expected to create gen- now,” he adds. out who has uine challenges for society. The ace in the hole for Google is its employ- custody of “People finally have to come to grips with the ees’ immense intellectual potential. “If you took the con- reality that the rising tide does not lift all boats, it just the sheer number of people with advanced sumer via is creating some super yachts, and a lot of people degrees or IQ over 120, there’s more of them at their mobile are drowning,” Galloway sums up. Google than at NASA, the CIA, the KGB, or Air- phone.

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Betting on Digitalization

BY ANDREW SCHOLFIELD

The pace of digitalization is forcing CEOs to go all in, whether they’re confident or not. In response, Fujitsu is spreading customer risk by dealing out multiple hands.

The only choice A double-edged sword success of digital projects was a gam- Fujitsu’s Head of EMEIA and the Amer- A study of over 7,000 respondents ble. Fujitsu is clear on how to approach icas, Duncan Tait, doesn’t hold back found the overwhelming majority of fi- this disconnect - multiple pilot proj- when emphasizing the importance of nancial service consumers were happy ects, allowing for 90% failure, followed digitalization. “I used to say that digita- for banks to manage and have insights by rapid scaling of those that succeed. lization is the biggest thing that's hap- into their data, provided privacy and MetaArc is Fujitsu’s global digital busi- pened since the industrial revolution, security were maintained. Of concern ness platform enabling “customers to and I was completely wrong. Digitaliza- to banks should be that 1 in 5 surveyed run several programs all at the same tion is the most fundamental thing since would buy financial services from Face- time.” For Tait, the acid test of a digita- humans were able to communicate.” book or Google, and with “two-thirds of lization project is if it can be scaled to 22–29-year-olds having changed banks the point where it can secure the future A fundamental shift in the last 5 years,” finance would seem of the organization. He believes many Digitalization changes everything, af- ripe for disruption. On the flip-side, fail on this key criterion. fecting core aspects of business pro- the same study found one-third saying cesses, customer interaction and prod- they would buy other services, like mo- Playing the new game ucts. “The most pressing areas for our bile phone or energy, from their finance Senior decision-makers fully under- customers are how to engage with their provider. stand the opportunities and threats markets, and the fundamental nature posed by digitalization, but are “ner- of what they deliver,” Tait explains. Pro- Don’t bluff, spread your bets vous” about how they will affect the cesses gain obvious benefits from dig- A Fujitsu study of 600 European C-lev- “long-term health of their organiza- italization, as well as the ways com- el executives and ICT decision-makers tions.” Tait believes that the “digital panies interact with customers. The indicated high confidence in digitaliza- guys” must be the drivers, but must in- more unexpected consequence is how tion with 92% stating that they would tegrate to “bring the whole organiza- it leads to the reassessment of products class their organizations as digitally tion into the future” or face being out- and services. mature, but two-thirds also stated the manoeuvred by more agile competitors.

NORDIC BUSINESS REPORT 2016 61 Digitalization

Hacked by a Unicorn? COLUMN We’ve all heard about high profile hacking cases in recent years, with companies Mikko Hyppönen, CRO, F-Secure like Sony Pictures or LinkedIn becoming victims of cyber attacks. For many companies, computer security became – at least briefly – a board level topic. But the discussion around hacking risks is often confused, and one reason is that people don’t know who they are talking about when they refer to hackers. WE FIND Most people probably don’t know any hackers. But they probably have an idea about what one looks like. The image of someone sitting alone at a computer, with their face obscured by a hoodie, staring intently at lines of code in which their particular brand of crime or mischief is rooted, has become widely associated with hackers. You can confirm this by simply doing an image search for “hackers” and seeing what you come up with. THE RELEVANT After 25 years of researching hackers, I’ve concluded that this picture distorts how people should see today’s threats. It creates very misleading ideas about the adversaries that people, businesses, and especially cyber security companies need to focus on. We have no hope of defending ourselves if we don’t know who the at- tackers are. It’s a mistake to take the old “hacker-in-a-hoodie” stereotype and think INFORMATION it applies to the threats we’re facing today. Why do we delude ourselves into thinking hackers wear hoodies like they’re some kind of uniform? When I see the hacker-in-a-hoodie, I feel like I’m being led to believe that hackers work in isolation. And that hacking is a hobby one indulg- es in when not working or studying. My takeaway from this image is that hackers are portrayed as pursuing a casual interest rather than working to achieve goals. FOR YOU But the idea that such unprofessional adversaries are responsible for things like Stuxnet or ransomware is incredibly naïve. Why don’t we see pictures of hackers wearing a suit and tie? Or a cardigan? Hacking is now a marketable skill that’s commodified as products and services, and sold to criminals, companies, and even governments. Hackers now have their own networks, both technical and social, that they use to buy, sell, and trade hacking services and malicious software. They pool resources and coordinate efforts, giving threats far greater capabilities than any individual hacker could develop alone. Silicon valley has started to use the ‘Unicorn’ term to describe a private tech • Own proprietary Big Data technology company that is valued at over a billion dollars – companies like Uber, Airbnb or See our solutions Dropbox. So the question is: do we already have Cybercrime Unicorns? The answer • Global data coverage is that we just might. & locations: • 400+ analysts worldwide .m-brain.com • Offices in 14 countries

62 NORDIC BUSINESS REPORT 2016 WE FIND THE RELEVANT INFORMATION FOR YOU

• Own proprietary Big Data technology See our solutions • Global data coverage & locations: • 400+ analysts worldwide www.m-brain.com • Offices in 14 countries Digital business processes efima.com

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