Entrepreneur for ever

Risto Siilasmaa hopes that the ongoing renaissance of entrepreneurship can help Finland get out of its present present stagnation.
When twentysomething tech student Risto Siilasmaa established a data security company, no-one even dreamed about today's start-up bonanza.

F-Secure's lobby is abuzz with people darting about with smartphones pressed to their ears. The company's founder and biggest shareholder gulps down some coffee and, smiling, recalls one of the high points of his career, a very special fax.

“Viruses were still fairly unknown in the early 1990s, so a lot of people thought we were hawking a useless placebo. The data security business was thus a tough nut to crack, you had to meet with every customer and convince them both of their need and of our solutions. But when we were faxed an order from a company, which we'd never even heard of, I realised that this could actually amount to something – we no longer had to push sales, as the customers were already willing to buy,” Risto Siilasmaa says of the early days of his firm.

Siilasmaa got into computers as a schoolboy and he's always had plenty of entrepreneurial spirit as well. Once the school day was over, he'd work a few hours at a grocery shop, code games for the Commodore 64 and write for some of the first Finnish computer magazines. He enrolled at the Department of Industrial Engineering and Management in 1985 while also working as a consultant to firms that were transitioning into the era of desktop computers.

“One of our assignments dealt with establishing a company and our task was to fill out the necessary official forms. My course buddy and I just decided to submit these papers to the Patent and Registration Office in addition to our teacher,” he says with a laugh.

The customers were happy, and the entrepreneur soon found he was short on time. This encouraged Siilasmaa to start hiring more people; first as consultants and then also for product development, where they got to work on software packages that would win over customers the world over.  

“Many people probably can't remember that, back then, Finland was still quite the backwater, a place without a single international software company. You were only allowed to sell foreign apples at certain times of year. Getting to code something that would be used all over the world was thus pretty far out. And I'll never forget what it was like to first visit our offices in Silicon Valley and see F-Secure's sign hanging next to those of giants like Apple and Oracle.”

Out of the foxhole

Siilasmaa resigned as CEO in 2006, but says he will forever be an entrepreneur.

“For me, entrepreneurship is an attitude and a way of life,” he says.

He considers entrepreneurship to be, first and foremost, a way to shoulder responsibility. It means that you don't ignore problems and leave them for others to resolve. He says we should not burrow into foxholes, blame others and play little tactical games, when we can take the long view and build on our shared strengths.

A good example is provided by Nokia. When Siilasmaa was appointed Chairman of its Board, Nokia was surrounded by bankruptcy rumours and generating significant operating losses. In just over three years, the value of its business operations has multiplied twentyfold and Nokia is once again the most valuable company in Finland. How was this possible?

“The first step was to face the facts and the second was to carefully analyse all possible new paths, without ruling something out just because it did not please everyone. And then we worked really hard. Finland needs to do the same now. It isn't easy or painless, but we do have to consider what would be the best overall scenario over the long run instead of getting stuck debating whether it is possible to lengthen the working day by five minutes,” he says with some frustration.

Bold decisions are needed to, among other things, ensure the standard of higher education. Siilasmaa thinks it unwise for a country of five million to let everyone do everything while trying to divide an ever-shrinking pie equally to all.

“Without a clear division of labour, profiling and investing in the best, everyone loses.”

Finland = Sibelius and Slush

Siilasmaa is active in the alumni section of his student association and serves as the chairman of Aalto University's fundraising campaign because he feels it is his duty to do so – and because he wants to change things. When he was a student, he was frustrated by the lack of sufficient attention on identifying and nurturing the individual strengths of students. He acknowledges that things really have developed for the better since then, however.

“I want to be a part of shaping this community into something so fine that each and every Aalto graduate will want to remain involved throughout their lives.”

Siilasmaa reckons a lot of good work has been done in boosting corporate cooperation, for example. But for him, one achievement towers over all the rest.

“The University quickly established a framework for entrepreneurial activities and then, wisely, let the students take the effort forward undisturbed, relying on their own drive. The results are staggering: half of all new companies emerging from the university sector come from Aalto, and Slush has developed into a symbol like Sibelius that has done more for the image of Finland than any government project ever could,” he says praisingly and notes that the Aalto ecosystem has potential for much more as well.

“If the pieces fall together in the right way, the Helsinki metropolitan area could be built into an enterprise hub for not only Finland, the Baltic States and the Nordic countries, but for all of Northern and Central Europe. Municipal administrations, the State and Aalto must be open-minded for this to happen.”

The renaissance of entrepreneurship will generate fresh business opportunities for Finland – if it is allowed to happen. According to Siilasmaa, a precise vision is not needed; the prerequisites and freedom to act, are, however, necessary. These make it possible to jointly experiment with different ideas, quickly discard things that don't work and focus on developing alternatives with good potential.

“Artificial respiration isn't worth it: the more rapid a cycle of giving up on our failures we establish, the sooner we'll be able to identify things that can succeed in a big way, at least for a moment in this rapidly changing world.”

A pie of trillions

Siilasmaa is an avid investor and keeps a close eye on Finnish startups. He lists food takeaway and home-delivery ordering service Wolt, financial data search engine Alphasense, waste collection digitaliser Enevo and Youredi, which provides logistics data interchange solutions for Alibaba, as some of the most promising new companies. All of them are alike in the sense that they have turned digitalisation into a business, which knows no boundaries.

The pie up for grabs is hefty. The World Economic Forum has calculated that digitalisation can add an extra 100 trillion dollars to the gross world product over the next few decades. In practice, this means that almost all low tech business will be transformed into high tech enterprise.

“Soon, digitalisation will play a significant role as a factor behind competitiveness in every industry. Consider, for example, Enevo. They digitised waste bins, enabling collection vehicles to optimise their routes and avoid unnecessary transports. Municipal waste management operations have achieved savings of up to 60% and, at the same time, residents are delighted because they don't have to look at overflowing biowaste bins. Giants like Airbnb and Uber are taking advantage of the same phenomenon: allocating spare capacity to where it is needed. Siilasmaa hopes that such flexibility will extend across all of society. Furthermore, it would be beneficial to the environment if resources were not wasted as they are now.

“The speed with which we manage to transfer our expertise and resources to new activities may well be crucial for our future.”

Risto Siilasmaa established Data Fellows in 1988. The company listed on the stock exchange and changed its name to F-Secure in 1999. Siilasmaa vacated the CEO post in 2006, but continues to serve as the Chairman of the Board of Directors. He has been the Chairman of Nokia's Board of Directors since spring 2012 and the Chairman of the Board of the Federation of Finnish Technology Industries since the beginning of this year.

Risto Siilasmaa completed his M.Sc. in engineering at the Helsinki University of Technology in 2009. His industrial engineering and management thesis dealt with the role disruptions play in strategy work and it received the highest grade.

Text: Minna Hölttä
Photos: Jaakko Kahilaniemi

The original article is published in the Aalto University Magazine issue 16.

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