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Finnish your business: episode 8
Published : 28.05.2021

This episode in conversation with Gian-Luca and Elie El-Khuori we discuss the different offerings from Newco Helsinki.

Transcription notes

Interviewer: Sethi Namrata
Respondent: Janne Jokinen

wo- an unfinished word
(word) an uncertain passage in speech or an unrecognised speaker
(-) an unrecognisable word
(–) unrecognisable words
[pause 10 s] a pause in speech of at least 10 seconds

, . ? : a grammatically correct punctuation mark or a pause in speech of less than 10 seconds

Length of the recording: 22 minutes

Namrata Sethi: Hello and welcome to Finnish your Business! In our podcast we leave no business unfin(n)ished. I am your host Namrata Sethi, this podcast is brought to you by MEGE, which is a joint project of Haaga-Helia University of Applied Sciences, Helsinki Business College, Aalto University, and the Shortcut, and is funded by Uudenmaan Liitto. Today we have two guests joining from NewCo, Gian-Luca and Elie, thank you for joining us and welcome to our show.

Gian-Luca Cioletti: (-) [0:00:37] welcomes, thanks.

Elie El-Khouri: Thank you.

Namrata Sethi: If you could please introduce yourselves.

Elie El-Khouri: Okay, can I start? My name is Elie El-Khouri and I am a business advisor from NewCo Helsinki. I’m working here since 2006 as, in the beginning, was like Helsinki Origin Project for the Immigrant Entrepreneur, and I was there as a project manager. Now I’m a business advisor and I do advising for the immigrant, also for the Finnish. So I have three, four, actually four languages, but I’m strong in only three languages: Finnish, English and also Arabic. So the French language is support language for me. But anyhow I’ve been here more than since 2006, like, more than 15 years. And lot of business ad- ideas and the business visitors and the start-ups and so on. That’s shortly in the beginning, so we can discuss later about my situation and how I work here. Thank you.

Gian-Luca Cioletti: So my name is Luca and originally from Florence, Italy, but been living more than 38 years in Finland and I’ve been working in the corporate side and I’ve been entrepreneur myself. And now I’ve been for little bit more than five years in NewCo as a start-up mentor and coacher. So this is more briefly about me.
Namrata Sethi: Great, thank you so much. What does entrepreneurship mean to you and why is it important?

Elie El-Khouri: Okay, that’s a good question. Why is it important? First, I should mention or I can say shortly, that I have been also entrepreneur from the since I came to Finland until 2006. So more than 16 years as entrepreneur. And even I finished it and I work as regular salary employee, but it’s still in my heart. That’s why I have a side entrepreneur business beside of that job. So it’s important because entrepreneur can bring new idea, new opportunities can help society. (-) [0:03:26] entrepreneurs there is no any jobs, extra jobs. Even like entrepreneurs like small, actually they can have at least two workers. Entrepreneur like sole trader, himself plus the other support person for the bookkeeping, accounting and extra if he can hire somebody as a B2B work. So it’s very important, the entrepreneur. In everywhere, it’s not only in Finland.

Gian-Luca Cioletti: Yeah, so basically, I pretty much agree what Elie said that entrepreneurship, it’s a something that you know. They make jobs or generate jobs, create jobs for people, they pay taxes, and they create new things, new ideas, new product. And that’s why entrepreneurship is very important today to the society. And I was saying that basically, (there’s) been a shift in Finland and in many other countries in the world, that the entrepreneurship, let’s say more and more it’s kind of micro- or small companies and not anymore this corporate. So basically, yeah.

Namrata Sethi: Thank you so much. And how does NewCo help entrepreneurs and what does NewCo do?

Gian-Luca Cioletti: Well actually, so. We are basically divided, let’s say, in two groups. We have the people that are advising basically this kind of sole entrepreneurs, that want to create or to establish in you know, cafeteria or something like that or just the shop. And then this is a new theme, basically, in NewCo regarding the advisoring a start-up. Because the dynamics in the start-ups, and not only the dynamics, but many things change from sole entrepreneurship and start-ups. And actually the start-ups phenomenon in Finland is very young, let’s say, because it’s almost ten years old when basically Nokia disappeared from the Finnish economy and the Finnish, let’s say landscape.

Gian-Luca Cioletti: More and more we see that new students, they create start-ups just because you know, Nokia during the 90s and 2000s before Nokia disappeared, Nokia was basically the locomotive of everything in Finland, for you know. And because Nokia disappeared very fast, and because in Finland we have one of the best school system in the world. So basically these young students that graduated in engineering or whatsoever, it wasn’t anymore the industry or let’s say the corporate industry, recruiting them. So after Nokia collapsed, basically we see huge incremental of start-ups. And because in the past, when we speak about the 70s, 80s, the Finnish industry was more diversified than not today.

Gian-Luca Cioletti: We had mechanical, metallurgical, we had forest, we had wood. We had a lot of things. A lot of industries. But during Nokia period, basically all these industry disappear from the Finnish industry landscape, because actually they couldn’t pay the same salaries that Nokia was paying. So basically during Nokia period in Finland, wood industry, paper industry, many other industry, closed or moved to another, cheaper countries to manufacture. And that’s why when Nokia collapsed, we didn’t have so much any other big industries or corporate recruiting them. So that’s why. And so the start-ups, we see that it’s a phenomenon that is growing more and more. Not only in Finland, but everywhere.

Elie El-Khouri: Yes, that’s good what, I agree 100% with Luca. That’s a good explanation about the situation in Finland and the history with the change and how it’s moved. But actually that why we are exist, NewCo Helsinki. Because of this situation. So that’s why we have two group in NewCo to help the new entrepreneurs, that new enterprises also. We have the business advisor group and we have the start-up services, what (-) [0:09:26] Luca, he’s working there. So if the customers like in the normal situation want to start as a normal business and he need a normal business advisoring, for example if he’s interested to establish a company or he need help for developing his company. That point he can use our business advisory services. But once we go for that start-ups, who want to grow up and to be like globally, to start to sell a product or services to abroad. So then he go for start-up services.

Elie El-Khouri: We have two access in that business NewCo Helsinki services. One is for the start-up advisory, the second is for business advisory. So that why we exist in Helsinki and actually for the immigrants we have the project, which is especially for the immigrants in NewCo Helsinki for services. Our customers can come from all of the Helsinki region, also from Uusimaa, also sometimes come from Oulu. Somebody phoned for me by Teams, we have a lot of facilities now we can use. We can give advising, so immigrants we can have from all of Finland. Also from abroad, people who want to come to Finland. There’s a lot of challenges for the people who want to come to Finland, so that’s why I think NewCo Helsinki is important now. It’s not only for Helsinki, it’s also for all Finland.

Namrata Sethi: That’s great, thank you so much. And at what stage can the entrepreneurs come to you?

Elie El-Khouri: It can come from minus zero also, with an idea also. Some people, they come, only they want to write a business plan. Some students for example, we have a lot of networking with the university, with any kind of that businesses like Haaga-Heli. Lot of students, they come only to check about the business idea itself, to how they can build the future for their business, how they can do the calculation. So we have a lot of kind of groups, so they can come minus zero. Especially for start-up I know that Luca, he has a lot of customers that are still in the first step like minus maybe two zero. I think we have, and we are very important, I think that NewCo Helsinki is important for the start-up businesses. Actually we have more than 4000 customers per year, more than 1200 new entrepreneurs, new businesses, in Helsinki. What about those who come from somewhere else to Helsinki? I think we do a lot of job and we (got) to do more, I think.

Gian-Luca Cioletti: So yes, like Elie say that basically, let’s say that the young entrepreneurs especially because they don’t have so much experience in running the business, financing, reporting and the drafting business plans or financial plans, marketing plans. All this kind of things. But most difficultly these young students, they just already, even during the school, they group on and they decide to start to develop an idea. And then they graduate and they decide to establish company, so they come to us and we help from the very beginning. From the scratch. When actually the team group up and they start to formulate all these shareholder agreements, then we establish the company, then we decide how to proceed. Step-by-step we build the company until they got their first fund. We help them with all these applications with Business Finland and all other organisations, we try to network them with the ecosystem in the Helsinki area. But also we help, as Elie say, that help company that want to come to Finland and establish the company in Finland and start to export their services and product to Europe and other countries. Basically we have very lot of diversified services that we can offer to the company and to the teams from any stage and from any kind of entrepreneurship type.

Namrata Sethi: That’s great. And what makes the Helsinki area an especially good place for starting a business?

Elie El-Khouri: Of course we can’t say Helsinki, because we are in Helsinki. (Anyhow) it’s depend on the business idea, what and how you offer and what kind of product. Nowadays that online businesses, you don’t need any location, especially Helsinki you can sell product abroad around the world. So things have changed. It’s not like, normal as before. But of course I can say Helsinki.

Gian-Luca Cioletti: Let’s say that many, many studies that have been done in Europe for example and around the world. So Helsinki area has been classified one of the most attractive and vibrant start-up ecosystems. This is maybe one reason why many companies want to come to Finland. Then of course because Finland as a country, it’s very stable country, everything is working. We don’t have very big trouble with infrastructure whatsoever. Nevertheless Finland is pretty advanced in many sectors: health sector, smart city, renewable energy and so. I think that’s the reason why Finland and Helsinki area is so important and it’s so attractive.

Namrata Sethi: Yeah and also I think there’s such a strong ecosystem, like for people if you start a business-

Elie El-Khouri: Yeah, exactly.

Namrata Sethi: and you have so many advisors, and they do (–) [0:17:17] aid venue, getting started to have your business.

Gian-Luca Cioletti: Exactly.

Elie El-Khouri: That’s right.

Namrata Sethi: And what trends are you seeing in new businesses coming up to NewCo? What kinds of new businesses are you seeing, like international or tech or industries?

Gian-Luca Cioletti: From my side if we speak about the start-ups. Actually in Finland there are few sectors that have been growing, pretty much. So technology because Finland has been always very technology-oriented country. If we think about the Nokia time, when Finland was the first country in the world issuing patents. So the tech side is very important. Then regarding the sectors, health sector has been growing pretty much and actually last year the city of Helsinki together with the University of Helsinki and the Hospital of Helsinki, they established a health incubator center, where we actually help and coach and mentor health sector companies. This is located in Terkko, where is pretty close to the Helsinki hospital.

Gian-Luca Cioletti: As I was saying that the renewable energy has been also kind of a sector where many start-ups, they focus. Because now, today, we are speaking a lot of renewable energy, how to save the world and this kind of climate change. So this has been a sector also. Regarding the smart city, as I said, Helsinki and not only Helsinki, but Finland, has been always one of the most advanced countries opening all these database and make possible to use the database to offer city centre different kind of services and more easy to use. This is also a sector where we see a lot of increment. And then of course, games. Games, it’s something we can not forget because games has always been also kind of a sector where Helsinki and especially Finland has been always very advanced. But yes, technology, it’s very important. And all around technology and (-) [0:20:43] has been developing different kind of services. The only thing that I see, the switch from hardware to software. If in the past Finland was a developing more kind of hardware product. Today we see more and more software products. So everything what is related to these sectors, more and more is software based and not anymore so much hardware.

Elie El-Khouri: Good. So from my business advisory services, as I mentioned in the beginning we have more than 1200 new companies established through NewCo Helsinki. The situation is not similar as before. Nowadays we have 40% of our customers, they are immigrants. You have to take this point of view. Before it used like, they say immigrant establish restaurant, they go for the cleaning companies. I don’t say that it’s not good. But anyhow, the situation have been changed. Now the immigrant also establish like tech company, IT-companies, they can go globally, they have networking. We need to start to use that situation. But the point is that, let’s say like cleaning company, now we have that cleaning company with technology. A lot of services can be not as regular cleaning. It’s something more than regular cleaning. So that’s why now situation, it’s not like before. We have all kind of customers, all kind of companies. Also immigrant, they establish all kind of businesses. It’s not like only that sector is for them and this sector for the others. So I see immigrant in Finland, they are in a good situation. Also I got the yesterday, last week Friday, a group from university like from Metropoli. And they are Finnish, but they have a good idea, they are young, they have a good techno-business idea and they are in the first step. They want to graduate. I wish they can go in that business. So all kind of businesses now can be here in Finland, it’s not only like regular business idea.

Gian-Luca Cioletti: Yeah, what Elie says is very important. Because actually many students from abroad come to Finland to study. Once they arrive here, they realise that hey, this is not like so bad like people make understand (laughs).

Gian-Luca Cioletti: Finland, even there is cold and there is many things, but actually Finland offer many good things. Let’s say for young people and many come to Finland to study and they remain in Finland. They start to establish companies, any kind of companies.

Namrata Sethi: I think even though broad study universities, they get more hands-on learning and they have so many practical courses.

Gian-Luca Cioletti: Exactly.

Namrata Sethi: Which really motivate the students and maybe, if they have any idea, they definitely support a lot to just go ahead to start your business.

Speaker: Yeah, yeah.

Namrata Sethi: And it’s a very safe environment also, I feel, to have a test market.

Elie El-Khouri: Right.

Namrata Sethi: What kind of pitfalls and challenges are there in the early stages, when you’re starting a business? Like maybe product market or (regulate), financing or even finding co-founders.

Elie El-Khouri: There is a lot of challenges for the first step. New entrepreneur, they want to start a business actually everywhere. It’s first the capital, arranging the financing. The second is of course marketing product itself, how they can build a product. And there’s many other small steps: opening a bank account, nowadays it’s a challenge for the new start-up and the new businesses. There’s a lot of challenges.

Gian-Luca Cioletti: So the challenges, well, as I said that the first challenge is that from my side the start-up phenomenon is very young in Finland. We can say that little bit more than ten years. When you compare in Silicon Valley, already in the 70s were established the first start-ups that then became you know, monsters in the industry. Like Apple, Microsoft, Intel and so on. So that, it’s already a challenge because people don’t know or they don’t understand how to run start-ups. What does it implement, be a start-upper.

Gian-Luca Cioletti: But yes, financing. I think it’s one of the most important things because people think that (rise) money for a start-up is very easy. Well, one friend of mine say that when your start-up is fundable, then it’s very easy to raise money. But if your start-up is not fundable, it’s almost close to impossible to raise money. So what does it mean, (a) company fundable? The teams has to be very skilled teams, the product, the fit market has to be there. The demand. These are the things that make a company fundable. So when actually you do something that people want to buy and are willing to pay for something, then there is no problem to raise money.

Gian-Luca Cioletti: The big difference in Finland, and for US market for example, is that if you can prove to investors that your team is able to deliver and the market segment is quite big, we are speaking about billions. Then in US they say that okay, here’s the money, do it. When in Finland, when you approach an investor and you say that I have this idea, so forth. The Finnish investor say okay, come back to me when you have something to show me. Like traction, like revenues, like to know where customers, whatever can make the company credible. That they can deliver actually what they are doing. So yeah, of course during the time also things have changed in Finland. Now we have the Finnish business angel organisation that is also very young and we have few venture capital. But unfortunately the statistics, they are not very good for Finnish start-up ecosystem. Because actually statistics say that over 95% of the start-ups in Finland die in the first two years of (their) life. There is many reason. Finnish market is so small and a start-up has to go international in a very early stage and this require capital investment. When you compare these figures to European start-ups. Let’s say that European start-up’s life, it’s four years before they die. Just because the internal market, they are bigger and they can grow actually first within the internal market. Let’s say that this, what we call (death) valley, where actually the company, it’s in a kind of phase where they need capital to break even. In Finland it’s two years and in Europe is four years. So actually company, they have more time to be there before they die and try to get to the break even.

Elie El-Khouri: That’s very important point, what Luca, he mention about how many years in Finland for the start-up until they start to run. I think the challenge is (-) [0:30:56] the capital. If the (-) [0:30:57] capital is not enough for actually two, three years, they can die before they reach breakeven. But even in Europe they have different (-) [0:31:08] capital system and they have different, for example, bank loan or support. Or easy money, let’s say like that, business angels. As Luca mention, in USA they are different mentality than in Finland. This is the most important. This is for start-up. But if you go for the advisory, like regular businesses, (-) [0:31:35] started in Finland. For example in NewCo Helsinki, our customers after five years, they are, still 80%, our customers are (like). This is the point, why? Because they use our services, they contact us every time. We follow them also, we send for them emails, hey we have that courses, that events, can you join and so on. So there is a service, we follow them. We walk with them. This is that they can stay alive after five years. 80%. When you (go for the) normal rate in Finland, it’s 40% after five years. So we have that two balances, two teams in NewCo Helsinki. I agree 100% with Luca that (here) we have different for money mentality. Building a money, building the (war) capital in Finland is absolutely different than USA or middle of Europe.

Gian-Luca Cioletti: But actually this is our role, that we are mentoring and coaching start-up in that sense. It’s like, we take them hand-by-hand and we try to make them understand to avoid the most critical reason why start-up fails in Finland. Basically, I think this is a very good result about our job that we do.

Namrata Sethi: Yeah, I’m sure. Yes. Alright. This brings us to the last question. What advice would you give to an entrepreneur in five words?

Speaker: Hmm.

Gian-Luca Cioletti: Five words? Not so many. I would say that don’t give up.

Elie El-Khouri: That’s good for start-ups: don’t give up. But for also regular businesses. Usually we use to give for example location, it’s important. Nowaday location is online also. Be online. Yeah.

Namrata Sethi: Alright. Thank you so much for joining us and providing us these wonderful insights on this topic. And thank you for joining the show.

Elie El-Khouri: You’re welcome.

Gian-Luca Cioletti: You’re welcome.