Kristian Segerstrale is Looking for World Changing Startups to Invest In!
Kristian Segerstrale is an entrepeneur, executive and investor in games, consumer internet and technology companies.
Best known as Co-Founder of Playfish, a social games company which was acquired by EA for $400 million in 2009, he is currently a Partner at Initial Capital, an investor and accelerator for early-stage technology companies, and a board member of game company Supercell.
Kristian's previous positions have included Director at LoveFilm; Executive Vice President at EA Games (staying on with EA after they aquired Playfish); and Co-founder of VP EMEA Studios and Publishing.
We spoke to Kristian about selling Playfish; the differences between building a business in Europe and the States; and his suggestions for Neelie Kroes on fostering entrepreneurialism and innovation in Europe.
TNW: Which of the Initial Capital alumni makes you most proud and why? Has Initial Capital funded any female-founded businesses?
KS: I've had the good fortune of working with some amazing people throughout my ventures at Macrospace, Glu Mobile, Playfish and now through backing great companies at Initial Capital.
What I'm most proud of perhaps is just how many of the people that I've worked with have gone onto start their own companies and gotten significant funding to do so.
Whether a Xavier Louis at Brainbow (formerly Playfish), John Earner and Simon Hade at Space Ape games or Tommy Chuang, Michelle Chuang and Kenneth Pedersen of Supersolid - they are all formidable entrepreneurs with a bright future. I'd also have to give a shoutout to Ilkka Paananen, CEO of Supercell who has built probably the most successful game company on the planet with his team at Supercell in only three years or so. As for female-founded businesses, we do have female co-founded businesses in the portfolio - Supersolid being an example.
The world does need more female entrepreneurs to bring better diversity to founding teams and the kind of business and product ideas being pursued.
TNW: What are your predictions for the games industry in the next five or ten years?
KS: We will see the gaming on personal touch screens like mobiles and tablets becoming the main form of gaming, leaving living room screens, consoles and pc gaming as niches for some key categories of game only.
TNW: Tell us a little about the experience of selling Playfish and then staying on to work with EA. What did you enjoy about this transition and what was challenging about it?
KS: Selling your company is an incredibly emotional experience. There is an incredible high from being able to reward those who were part of the journey with real value for their hard work and to embark on a new adventure within a bigger company.
There is the incredible low of one day waking up realising your baby is no longer yours and that you're a "cog in the machine" whether you like it or not.
Getting used to big company planning process overhead and reporting out takes some time. But in the end my journey at EA, both running Playfish and later as Executive Vice President of Digital was an incredible learning experience.
TNW: You’ve been quoted as saying that European entrepreneurs ‘don’t dream big enough’. What do you believe is behind this mindset and what can be done to change it?
KS: I think it is already changing. Many European cultures often stigmatise failure or what they see as unrealistic dreams in a way that makes people not want to take bigger risks. They've traditionally raised less money and gone after less ambitious, more regional opportunities rather than the kind of global opportunities often pursued by silicon valley based ventures. We are seeing that change in a big way though.
I have big hopes for London, Berlin, Helsinki and other regional entrepreneurship capitals in europe and their ability to produce global winners in the future.
TNW: Tell us a little about the startup scene in your native Finland. Is it a good place to be a tech entrepreneur? What kinds of startups are flourishing?
KS: Finland has become a great place for entrepreneurs. There is a very highly skilled technical work force, great infrastructure for entrepreneurs through organisations like Startup Sauna, lack of red tape, a good immigration framework, and even government subsidies have made entrepreneurship explode in Finland in recent years. The most well known results are perhaps game companies like Supercell (Clash of Clans) and Rovio (Angry Birds). But there are also companies like Zenrobotics, Valkee, Moves and Oncos, all of which show significant global promise.
TNW: Building a business in Europe and US; what are key differences?
KS: The US and Europe are both big places. I can perhaps best contrast the Silicon valley, London and Helsinki for example. I would say the biggest thing that sets the Silicon Valley apart is the sheer density of talented people who have worked in multiple startups, had multiple exits, and seen lots of things go right and wrong in small companies. It enables companies to scale quickly, and with the sheer mix of venture money and talent around you can get explosive result.
The downside is that talent and office space area very expensive; there is sometimes a sense of a mercenary culture where there is less loyalty between staff and companies.
The advantage that London and Helsinki have is sheer scale of talent. There are great technical universities creating a large pool of talent, and with a growing amount of entrepreneurs who invest back into startups you are getting a growing sense of a network and access to much of the learnings of the Silicon Valley.
TNW: What is the recipe for expansion in Europe? First, get a strong foothold in your own country, or internationalize quickly?
KS: The beautiful thing about the internet, connectivity and a growing amount of enabler services in marketing and payments is that it is very easy to be international from day one.
I would not discount differences between countries. In fact one of the aces that Europeans hold is an intuitive understanding of how you need to approach markets differently.
But I would not limit the ambitions of a startup to a region. I would test out the proposition in one country first to give you the opportunity to tweak and find a product market fit, but then internationalise as quickly as possible.
TNW: Please give us three examples of up-and-coming European Startups you admire, and why.
KS: I don't know exactly what you mean by up and coming but let me give you two examples of startups I admire:
i. Soundcloud: this explosively growing "youtube for sound" was an audacious dream that has turned into hundreds of millions of people using the service every month. It's run by a Swedish entrepreneur out of Berlin who frequently hangs out in the Silicon Valley. It didn't know how it was going to monetize when it started, but it still got funded and is now an incredible success story.
ii. Supercell: They are an initial capital portfolio company but I still have to point them out. Their financial achievements are incredible. They generated nearly 200M in revenue and over 100M in profit in the first quarter this year. That was more than a million dollars of profit per quarter per employee.
But far more impressively they've created the fastest growing game company ever by focusing on fun for players, not making money and by focusing purely on attracting and nurturing incredible talent and focusing on a cohesive culture instead of expanding at all costs.
TNW: At The NextWeb’s April European conference in Amsterdam, Neelie Kroes stated, “I have a European Dream, too. That Europe becomes a place where entrepreneurs and innovators start and stay – before growing globally.” To underscore her strong commitment to make Europe a leader in the tech world, she gave her personal e-mail address to the crowd and asked that they contact her with ideas on how Europe can do more to encourage innovation and entrepreneurship. We’ll be interviewing Neelie later this month. What is your suggestion for fostering innovation and entrepreneurialism in Europe?
KS: I would advocate three focus areas for government to drive entrepreneurship. Firstly ensure that technology education is excellent, that we get as many kids who can code as possible - coding is not the only skill needed but it will be the basic literacy of the future. Secondly, keep immigration laws as flexible as possible. The best startups are created by the best talent in the world.
Much like top athletes, the top coders, artists, product managers and CEOs will go where the other talent is and where they see the biggest potential to grow their venture.
Lastly, try and remove any obstacles to entrepreneurship and investment into startups - obstructive labor laws, disadvantageous tax regimes for investing into startups and so on. Beside that I would look for governments to shout loudly about how more entrepreneurs are needed to destigmatise the profession where needed. But beyond that stay out of the way. I would try hard not to pick winners or get into the venture capital business. There are great private companies who do that.
TNW: Is there anything we haven’t asked you, but you would like to share with our community?
KS: This was pretty comprehensive I thought.
My general advice is that there is no better job than being an entrepreneur.
You get to create the future and leave your footprints in the history of some industry. If you are working on something that will change the world and are looking for a partner to help with things ranging from financing to marketing and scaling up, look us up at www.initialcapital.com. We would love to hear from you!
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