Five startups from Norway
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Government aid programs have failed to generate startup scene basically everywhere they were used.
I think buulding a real startup scene is a long process, starting with a few companies that breakout, a good culture and the willingness of private capital to invest. It is layers and layers that build upon eachother until a critical mass is reached.
Regardless, you're right that it does take a lot of time. For Silicon Valley it took multiple decades.
But it does seem to me that the nordic startup communities are growing very rapidly. There's cause to be optimistic. For Norway one of the problems is that the vast majority of new investment is still in oil and gas. And I suspect that community of engineers and investors are more likely to grow into a community centered around subsea and other marine activities even after oil becomes unprofitable.
What nobody has mentioned yet is that Norway has a healthy semiconductor and electronics design industry. There are some exiting startups there that people often forget about.
All those costs must make it far more expensive to build something.
Then finance was let loose in the property market in the 80s, and things have been rising ever since.
Effectively things just snowball once it hits some kind of threshold. In particular once finance gets involved, and loans gets stacked on top of loans.
>Didn't Silicon Valley grow out of a collection of companies doing defense contracts and research grants?
I think you're talking past each other. The parent was referring (AIUI) to government programs specifically intended to promote a "startup scene".
So you may be right that government spending was responsible for making SV what it is now; however, that spending was not in the form of "hey, we want to jumpstart a specific kind of business environment by filtering for companies that meet that mold and heavily subsidizing them in their early stages", which is the kind of aid program the parent meant.
The SV funding you're referring to, by contrast, was contracts for stuff the government had wanted for (and was optimizing for) completely unrelated reasons, and which (over a long time) created a startup scene as a side-effect.
huh?
Less social acceptance of failure, perhaps. The prevailing wisdom a few years ago was that having a failed business on record is still a bit of a black mark (wrt getting future investment funding, etc.)
The reason the Nordic countries top these list is because they have things like good working conditions, time for yourself, overall decent education systems, relativly low bureaucracy, universal healthcare etc. If you're in the US you can change jobs until you find one where they respect you, pay for extended vacations yourself, move to a good school district, pay lawyers to handle things for you and have private health insurance.
What you can't buy is not having to care. That's what the Nordic countries are good at. You can focus your energy on the things that matter. You'll find a disproportionate amount Nordic people in almost all "digital subcultures", from e-sports to systems programming to startups.
This is changing in some ways. The Nordic countries are becoming more like the rest of the world with health care systems that are hard to navigate, high private debt and valuing status over substance. But it's still a very good place to live.
If you are a citizen of a country like Australia, the medical safety net is a life saver. No way will insurance pay for complete cancer treatments.
And enjoying this http://www.orklafoods.no/var/ezflow_site/storage/images/sels...
Curious (from a US perspective) how the startup death march applies to seasonal variation. Are substantial vacations / outdoor enjoyment normal when the weather turns nicer?
If you're lucky you can expect at a good chunk of extra days days of in may when we celebrate different christian days and of course constitution day on the 17th.
Oh, and at easter you'll have 3 days of. Most people (at least families) take the whole easter week of. Working in the government you'll often find a concept of summer time, where you work from 8 to 15 from around may to sometime in august. Those hours are to be worked extra during the rest of the year though.
Wouldn't it be hard to create a scene like that in a socially developed country. Large wages would mean ridiculous taxes, so it would be very expensive to attract talent and workforce, based on wages alone(think Bay Area in the US). What about iterating quickly, which involves hiring and firing people quickly as well? If I'm not mistaken, in the US you can fire people on the spot, but that's not the case in Europe and Norway. You have strict labor laws, notice periods, the whole shebang. Won't that be an extra burden for startups?
edit: spelling
Norwegian corporate taxes are low, at 25% corporate income tax [2], well below the OECD average, while US corporate taxes are one of the highest in the world and by far the highest of any OECD country [2] [3].
> What about iterating quickly, which involves hiring and firing people quickly as well?
Then hire people on contracts. Nothing in Norwegian law prevents you from hiring and firing at will as long as you don't make people think you're hiring for a position that is meant to last.
[1] http://taxfoundation.org/article/comparison-tax-burden-labor...
[2] http://stats.oecd.org//Index.aspx?QueryId=58204
[2] http://taxfoundation.org/blog/us-has-highest-corporate-incom...
What you can't do is to fire someone because you don't like them or fire someone while you at the same time is hiring for positions the individuals you are firing are qualified for.
While what you say about contractors are only partially right. If the contractors are hired as individuals, they can legally claim a permanent position after working there for three years. If they on the other hand are engaged through a consulting company or similar, that will not be the case, since then the contract is between two companies. If the consulting agency does not have other contracts available, they can downsize.
As a small business in the U.S., I'm registered as an LLC, but file for taxes as a sole-proprietor. That means that all business income is pass through and considered personal income. Though, income brackets as graduated, much of my income falls into the 25% tax bracket. Next, since I make less than the FICA tax ceiling of $118,500, my entire income is subject to FICA (payroll) tax, so I pay an additional 15.3%. If you work for someone else, you pay half that, but that's the joy of being self employed. After that, my state income tax rate is 4.9%. Yes, it's graduated, but not by much. Finally, I have a state gross-receipts tax of 7%, but I typically offload that onto my customers. Adding that all together, I pay 45.2% of my business income on tax, which is everything minus business expenses. If I count the gross receipts tax, this would be 52.2%. Also, since I'm self-employed, I have to pay for my own health insurance. Let's just say that the health care market place isn't all that we hoped. I did receive a discount this year, but I had been paying $500/month or $6000 a year. Yes, there is cheaper health insurance, but as someone who has had complicated dealings with hospitals in the past, I refuse to use an HMO and will always use a PPO. Do note, health insurance premiums are not tax deductible and until we meet our yearly deductible, we pay 100% of the expenses. Generally, I budget $8000/year for health insurance premiums and expenses.
In Norway, business structures are slightly different, but the closest thing to a sole-propietorship is an enkeltpersonforetak. I don't believe you get quite the same benefit as an LLC sole-propietorship in the U.S., but they're similar for tax purposes because its also considered a pass-through entity. Now, I'm not completely up to date on the current tax situation. Looking at my current tax card, it says that I would pay 47%, but I don't currently live there and my taxes were messed up enough where I required an accountant. When I was living there, my tax rate was somewhere between 34-36%. However, that included a few percent tax discount because I was a skilled, technical worker who just moved to Norway and was in my first two years of work. Next, I'm required to pay VAT on my contracts, which is 15% of the total. However, like gross receipts tax, I pass this on to my customers. Like the U.S., business expenses are deducted off the total.
Now, certainly, I'm more familiar with American taxes. However, in the last year, concretely, my American tax rate was 45.2% and my Norwegian tax rate was 47%. That's pretty much a wash. However, in Norway, I can access their health system, which saves me $6000/year in premiums and, I'll estimate $1800 in other medical expenses. It depends on the exchange, but I recall paying 200NOK for a doctors visit, which is is about $30. Now, certainly, cost of living in Norway is higher than where I live now. It is lower than living in many major cities. I just checked finn.no and a decent one bedroom runs about 8500NOK, which is a little over $1000/month.
As far as getting access to money, I don't know the investor scene, but I do know something about the grant scene. In Norway, Innovation Norway is supposed to give out good grants with few strings attached. In terms of strings, my impression is that it compared to the SBIR system in the U.S. Though, dear god please, check the details.
Look, the biggest thing about doing business in Norway is that although its western, living and doing business in Norway is very different than the U.S. Until you get a handle on the nuances of janteloven and learn to speak fluent Norwegian, things are tough. You're also living in a small environment, which has advantages and draw backs. However, candidly, Norway is very isolated compared to the U.S. That being said, I do not believe that Norway has a hostile environment to business. To the contrary, if you're making less than $200k/year I contend that it may be cheaper to live in Norway when factoring in taxes and health care. If you're making more than that, then the equation probably shifts with how money can be funneled through an S-corp or C-corp and dividends in the U.S. Though, Norway has its own tax structures that businesses use to shelter money.
Anyway, TLDR, doing business in Norway is fine and, in terms of taxes, not that different than the U.S. Doing business in Norway is done in the Norwegian style. It's not that hard to learn, but do not expect to just show up and operate and usual. Personally, I think it takes 1-2 years to figure out the culture and by year 3 to be fluent enough in language to really start working the system.
For those not aware of the intricacies of this, if you work for someone else, your employer pays half of that 15.3%. (And reduces your salary accordingly.)
In this respect, the self-employed don't pay more taxes then anyone else. The rest of us simply don't realize we are paying it.
Second, as far as language, there are great resources locally to learn language, such as from the municipal government or the university. Generally, on a personal level, people are pretty helpful as well. In addition, everyone speaks English, so if you get stuck, you can just ask in English and get unstuck. I found that the first three months everyone was pretty good at switching to English to make me feel welcome in conversation. However, after about three months, there was a not insignificant number of people who stopped and figured that I'd be there long enough to speak Norwegian. Candidly, that's not enough time and it was somewhat jarring. For a native English speaker, figure on about two years. For a native German speaker, figure on about one year, but, certainly, language learning is a personal sort of thing that takes as long as it needs to. Overall, I think Norwegians have a difficult time listening to Norwegian in a foreign accent; it doesn't happen that often, so their ear isn't super tuned to it. That makes some early speaking difficult as people look at you like you're crazy. Over time, that moderates.
Professionally, janteloven is a very real phenomenon that needs to be learned and understood. That's a really, really long conversation, but the short version is that if you come in energetically into your first job with some ideas that you want to share, you're going to be in for a shock and many people will think you're a prick. Note, this far more subtle than "telling other people how to do their job". Now, it's not that people can't share ideas. They do, but in a different way and one that can take a bit more time. Play it cool. Go to lunch everyday with your department and coworkers. Go to afternoon coffee with everyone and bullshit. After about a year you'll probably figure it out. I really, really screwed this up at my first job out there. Nowadays, I find it relatively easy to negotiate, but it was a big learning experience for me.
Overall, I do find people there friendly and welcoming, in a very Norwegian way. If you take the time to learn the language, even slowly, and have even a small amount of interest in Norwegian sorts of culture like påskekrim, funny traditional foods, and winter activities, it goes a very, very long way. Norway is not, but any stretch, Shangri-La, but I believe it's very doable as an immigrant. Mostly, it'll come down to whether or not you like living in that culture. Generally, I say it takes two to three years to figure that out.
FWIW, I was working with a big bank and all business was conducted in English because they were spread across multiple countries.
There's paperwork, but the paperwork is easier when the employer wants you, so defer it for now.
I don't know about non-EU nationals, though I know people from the US and Canada who managed to get an EU nationality because of their grandparents and simply used that to avoid worrying about visas and all. That said, the companies will be very helpful if you need assistance with paperwork so you should be fine when it comes to it, though I doubt you'll need the help.
About the language, English will be fine for nearly any tech company.
That said, I'd also check out Berlin and Copenhagen; big startup scenes there.
Never worked in The Netherlands so I can't speak for Amsterdam, sorry.
Of all the countries in Western Europe I think it is by far the best right now to jump to from outside of the EU.
Employment is something else entirely. Skilled migrants can come under the knowledge worker program ("kennismigrant") or the European blue card program. There are a number of websites where you can read about this.
You do have to find a company that will sponsor you, but that's the main barrier to entry. Some Dutch companies want people who speak Dutch, but many will be happy to hire those who speak English. The Dutch government also offers incentives to people coming from abroad where the person pays 30% fewer taxes for the first 8 years in the country.
As an American who's looked into the possibilities, I'd say that the Netherlands is probably the friendliest country in Europe to migrate to. The Netherlands is welcoming to migrants (at least the skilled type), it has a healthy IT sector (with a good number of startups in the Amsterdam area), and English is widely spoken. I'd still advise eventually learning Dutch, but you can at least get along with just English.
I can confirm that, some companies I interviewed with in Sweden had Norwegian roots/owners. Two reasons: Sweden is cheaper and is part of EU.
We just delivered a new site for Oslo Innovation Week, and are currently working on the new Staaker website, who is mentioned in the article.
I'd say Flare (http://iamflare.com) and Unacast (http://unacast.com) is worth keeping an eye on as well.
Not quite: The population is closer to 5,215,000 [0].
I've always felt jealous on the US startup culture, where you get investments. In Norway, I feel it's more like you apply and get small grants. But looking at this article things have gotten better.
What concerns me the most about our startup scene, is the scale. A successful startup in Norway can only reach 5 million people before it has to be modified to fit a new country with different language, regulations and customs. In the US, you can reach tens of millions, and when the app has grown big enough us Norwegian will accommodate and get used to the app, not the other way around.
And that’s one of the biggest advantages the EU is supposed to bring, but which several countries are still blocking. You can read over 200 million people in the EU just with an English product, and if the single market was done better, it’d be very competitive with the US.
Instead, we’re seeing Britain leaving, and potentially the EU breaking apart completely.
You can see it like that, or you can see it the other way around. This is pretty much make-or-break, put-up-or-shut-up time for EU integration. The Lisbon treaty is finally biting. You can't be "mildly pro-EU" or see it as "simply a trade union" anymore; you either go all-in with fiscal and legislative harmonization, or you go home. Italy and Greece were the first to go all-in; Britain might be the first to go home. The next decade is a tipping point one way or another, and it might actually be the beginning of the "real" federal EU a lot of people have been asking for 40 years.
'go big, or go home' being a very common phrase.
https://www.urbandictionary.com/define.php?term=go%20big%20o...