Skype and Spotify are amongst the companies I admire the most.
Why?
1/ They were funded in Europe
2/ They launched new concepts (P2P calls and messaging/ music streaming subscription)
3/ They became global leaders
And I strongly believe 3/ is a consequence of 2/, see below.
Do they have things in common? Unfortunately, I don’t have time to do in-depth research, but they were both founded in Sweden at a very high level.
Is Sweden the best global start-ups scene?
Sweden has 3 characteristics I believe to be material:
1/ Their language has a limited reach: Swedish is spoken by 10 million people in the Nordics. So a very high proportion of the Swedish population (close to 90%) can speak English fluently.
2/ Their home market is limited, so founders quickly have to think about selling abroad to sustain their growth trajectory. Similar to Israel. Bigger markets like France and Germany can sustain growth longer, adversely delaying international expansion.
3/ Niklas Zennström, the founder of Skype, set a path for others to follow. Skype become the global leader for P2P calls and messaging and was sold for $3.5bn. Spotify is now a $50bn market cap company. Global ambition and founders’ knowledge trickle down, and I expect more Swedish start-ups to become global leaders (Klarna being on its way with a $10bn valuation).
Skype and Spotify founders were Explorers. Instead of copying an existing US success story or create an incremental improvement of an existing product or process, they invented new ways to communicate or listen to music. Interestingly, Spotify was inspired by Napster and Kazaa, respectively founded by Shawn Fanning and…Niklas Zennström.
I believe the only way for European start-ups to become global leaders is to create a new category, to have a blue ocean strategy 😎. Otherwise, you’ll find a bigger US company on your way 😯. Or be a nice local player 🙄.
Skype and Spotify are great examples of the kind of companies we need to foster in Europe. We have lots to learn from them!
If you have a global mindset, if you want to be the new Daniel Ek, however small your living room may be as of now, you’re welcome to join Venga!Labs!