On a Monday morning in late May, top startup entrepreneurs and investors gathered to discuss business topics critical to supporting founders under the theme of “Startup Communities 2.0 – Scaling and Return on Communities”.
With a blockbuster list of keynote speakers and panelists, including leaders from Techstars and Oracle as well as a former CBS host. Some may feel surprised upon hearing the name of the conference: Startup Iceland.
The breathtaking Land of Fire and Ice has steadily been growing into one of the most exciting startup hubs in the world. In fact, the community has gained so much traction that the President of Iceland and US ambassadors are regular attendees at the annual event, which started in 2012.
Today, on the second floor of Reykjavik’s iconic Harpa centre, disruptive ideas are pitched, meaningful relationships are formed, and insights and experiences are exchanged. Participants are bonded by their shared status as trailblazers in a sparsely populated country whose main industries are fish processing, aluminum smelting, and geothermal power.
The enthusiasm is tangible in every interaction; the awareness the founders present are part of something larger than themselves helping energize every conversation. Something fresh is growing in Iceland, and this is going to leave a lasting legacy.
At the forefront of Startup Iceland is Indian-born entrepreneur and investor Bala Kamallakharan. He’s been instrumental in laying a foundation for innovation and creativity.
Here, the founder of Startup Iceland shares his thoughts with me on starting up a successful startup community.
Millian Gehrer: What are the challenges in growing a local startup community?
Bala Kamallakharan: The biggest challenge is to get some of the key influencers in the community to care and take action. Founders need to organise meetups and encourage participation. This garners the momentum to get the community conversation going. Often, there is no immediate payoff to doing any of the above activities. You need a group of missionaries who believe in the end goal. You need leaders who can see a vision and act towards achieving that.
Millian: What if the odds are stacked against you?
Bala: In startup thinking, you have to be a contrarian. You have to go against conventional wisdom to change the world. I encourage all founders that I meet to listen to the naysayers, to use the resistance as motivation and channel the negative feedback to really dive fully into the idea they are working on.
The challenge and the opportunity is that no-one knows the answer. You need to have the courage to move forward with little data and a lot of uncertainty. It is better to do that when you are young.
If you are young and live in a place where entrepreneurship is rare, you have the whole market to yourself.
I like the following story of a Bata Shoe Sales Rep:
At the end of the nineteenth century, just as colonial Africa was opening up as a market, all the manufacturers of shoes in Victorian England sent their representatives to Africa to see if there might be an opportunity there for their wares. All duly came back in time with the same answer. ‘Nobody in Africa wears shoes. So, there is no market for our products there.’
The Bata rep, however, came back saying, ‘Nobody in Africa wears shoes. So, there’s a huge market for our products in Africa!’
If nobody is doing something that adds value, you have the first mover advantage. You can take the whole market, just like Bata did in Africa.
Millian: How does the startup environment in Europe differ from that in the US?
Bala: Currently, there is a brain drain with regards to startup communities. Most European startup founders who breakout move to the US. Startup community members based in the US are open minded about any crazy idea. I don’t see that often in the European startup communities. Europe has a lot of potential, but it’s still stuck in the old way of thinking. The mainstream conversation is how do we get back to the good old days?
In my humble opinion, the good old days are gone. The world has changed, demography has changed, the power structures have changed. Technology is at the heart of all this change. Europe needs to embrace this reality and invest in the next generation of entrepreneurs. Founders reinvesting capital into the next generation of founders characterises successful US startup communities.
Millian: Why should someone start their venture in Iceland?
Bala: Iceland has one of the best renewable energy infrastructures in the world. It is a country in a city. Iceland’s population is only 330,000. So everyone knows everyone else. These are huge advantages when you are in the early stage of a startup.
The riskiest phase of a startup is the product-to-market fit stage. Since Iceland is small, validating is cost-effective and fast. I have proven this thesis with my investments. Iceland is a great place to test a product market fit. I am not saying it is easy, but it is easy in comparison to other locations to get in front of your initial customers.
Millian: What do you wish you knew when you were 18?
Bala: I wish I had known that building a business can be learned at any age. Building entrepreneurship skills and relationships with people you want to emulate isn’t that hard. Also, I wish I had seen Steve Jobs’ commencement address at Stanford when I was 18. My two favorite quotes of his are
“You can’t connect the dots looking forward you can only connect them looking backward. So you have to trust that the dots will somehow connect in your future. You have to trust in something…” – Steve Jobs
“Everything around you that you call life was made up by people who were no smarter than you and you can change it, you can influence it, you can build your own things that other people can use.” – Steve Jobs
Millian: What makes a great entrepreneur?
Bala: Obsession about the idea and the unyielding attitude to bring that idea to life and impact the future. I discourage all my students in the “How to Start a Startup” class from doing a startup. There is only one good reason to do a startup: the idea is eating you and you cannot stop thinking about it. If you have that drive and willingness to learn and grow that is what makes a great entrepreneur.
Interested in learning more? Check out Brad Feld’s Startup Communities: Building an Entrepreneurial Ecosystem in Your City, which, amongst Boulder, Boston, New York, et al., features – you guessed it – Iceland!
Opinions expressed here by Contributors are their own.