Skype founder: 'cold winters' key to Swedish tech success

Swedish entrepreneurs Niklas Zennström, founder of Skype, and Andreas Ehn, founder of Spotify, spoke recently in Stockholm about the secrets to their success and why Sweden "punches above its weight" when it comes to producing tech start-ups.

• Spotify launches its services Down Under (22 May 12)
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• Spotify launches new app for Apple's iPad (2 May 12)

Niklas Zennström is one of Sweden’s best known and most successful tech wizards, co-founder of Skype and Kazaa, and founder of the investment company Atomico.

On Wednesday, the tech-guru spoke at Stockholm University to "encourage students to pursue entrepreneurialism", share some his esteemed insights, and to offer a few predictions about there the market for high-tech gadgets is heading.

However, on a snowy day in the Swedish capital, he claimed it wasn’t just the economic climate that was the cause of Sweden’s start-up trends.

“When the weather’s like this outside, what else is there do to besides sitting inside and creating a business?” he said, in response to why Sweden has so many startup companies today.

“But really, Stockholm is one of the places that has become more attractive to go to, and this has nothing to do with the weather. It’s because there are a lot of new, interesting, and high-quality companies here."

According to Zennström, there are several other aspects to Swedish business culture which also helps drive entrepreneurship.

“Sweden is punching way above its weight with great companies in terms of quality. We are not so hierarchical, we like to be pragmatic. It’s a culture that’s suitable for creative-ism and for getting companies off the ground,” he said.

Andreas Ehn, co-founder of streaming music company Spotify was also on hand to discuss management, leadership, and his latest collaboration with the Skype giant.

Zennström’s venture capital firm, Atomico, which has invested in over 40 international companies, has most recently endorsed Ehn's latest venture - Wrapp.

Wrapp is an online mobile application specializing in gift cards and looks set to take over the world.

The product launched in November and has already received funding for $10 million. According to Ehn, the plan is for Wrapp to be accessible worldwide.

But a good idea doesn't necessarily mean success, Zennström was quick to add.

“You have to try a lot of times to succeed. Even if you play golf – I’m a lousy player myself – but I know that if I hit the ball enough times I’m going to have one very good shot, and the ball will eventually go a long distance. It’s like this with being an entrepreneur. The statistics are against you and you’re for sure more likely to fail - but it’s important to try,” he said.

Part of this success can be put down to team management, according to Zennström.

“Don’t be afraid of hiring people smarter than yourself," he said.

"Insecure people hire people who are less intelligent, and that just creates more work. Those who are comfortable with themselves aren’t insecure about not being the smartest, and so can succeed by leading the way.”

The idea of intelligence was touched by Ehn too, who pointed out that a good leader doesn't necessarily need to be the most knowledgeable.

“Management is a support function, people who are solving problems that are in the way – the experts will always have more knowledge about the problem at hand than you do, so let them make the decisions, and just make sure you’re leading them in the right direction,” said Ehn.

During a discussion session with the audience, many audience members asked for the pair's thoughts about the future of technology.

“Today, everything is mobile, and I don’t think we’ll go backwards from this. This is a transition from two or three years ago when companies saw mobiles as a centre of their strategy," said Zennström said.

"There will be a growth increase, and a price decrease in the mobile market. There will be a change with the emerging markets which will yield different behavioral patterns. There will be smartphones in Africa or in the countryside of Brazil, and they will be able to trade with their mobile. It’s about opportunity."

Spotify founder Ehn agreed.

“Smartphones will become the default window to the internet, not the computer. It will be the first interface if you’re building something new,” he said.

As the climates change and technology is embraced, both Zennström and Ehn were interested in their respective products’ usership.

It came as no surprise that a show of hands from the audience showed what appeared to be 100 percent usage of both Skype and Spotify.

As for Wrapp, the response was a little more sluggish, but both men were confident in the product’s future in what is estimated to be a $100 billion American gift card market.

But it’s not just about the financial success, according to Zennström.

“For me, one of the reasons I worked hard was the financial reward, as that was a scorecard at the end of the day and good for competitive drive. But, I also wanted to make an impact. Just seeing that the world uses Skype to communicate is personally really rewarding,” he said.

In light of this, Zennström offered some final words of advice.

"I think it’s important to promote entrepreneurship and to encourage people, and specifically students, to consider entrepreneurship, and not to go and work for a big bank or consulting firm or engineering company – but to think of joining a startup. This is something that’s important.”

Oliver Gee
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