Entrepreneurship Popping in Silicon Fjord

By Blau, John | Research-Technology Management, July-August 2007 | Go to article overview

Entrepreneurship Popping in Silicon Fjord


Blau, John, Research-Technology Management


Europe is swinging again after the brutal technology crash at the turn of the century. Clusters of battle-scarred entrepreneurs are having another go across the continent. And a few like Swedish Internet telephone pioneer Niklas Zennstrom have had a dream come true--nurturing an innovative idea into a business worth billions.

Once again, innovative Scandinavian startups are leading the way. The Nordic region, dubbed the "Silicon Fjord" in the late 1990s for breeding so many technology startups, has bounced back as one of Europe's most thriving incubators. The region is abuzz with new Internet business models.

What's changed since the dot-com bust? Plenty.

The crash has given rise to a generation of technology entrepreneurs who lived through failure but, as a result, have learned some valuable--albeit painful--lessons, according to analysts. Lesson 1: Develop a solid business plan based on profitable, long-term growth, not just a fad. Lesson 2: Find a great idea that others can't readily copy. And lesson 3: Nurture a network of potential buyers.

Zennstrom and his Danish partner Janus Friis, scored high on all three. Their first idea, the peer-to-peer, file-sharing music exchange service KaZaa, allowed millions of people to swap music over the Web for free--but also made the young Scandinavian entrepreneurs targets of music labels, which eventually sued them.

Undeterred, Zennstrom and Friis decided to put their peer-to-peer expertise to work in another area:

Internet telephony, technically referred to as VoIP (voice over Internet Protocol). The partners launched Skype Technologies SA in Luxemburg, registered millions of users around the globe and sold the company in 2005 to Ebay for $2.6 billion just three years after launching it.

Now Zennstrom and Friis are busy at work on yet another new peer-to-peer service: Internet TV. The service allows customers to watch television programs on their computers. Rather than streaming the content from a central server farm, Joost works in a typical peer-to-peer fashion, with users serving as a network and sharing content among themselves.

Innovation Across Scandinavia

Even if the two Scandinavians have grabbed much of the attention, they're not the only entrepreneurs tinkering with clever ideas in the region. There are a large and growing number of inspirational success stories underscoring the rebirth of entrepreneurial spirit in Scandinavia.

Last year, the Swedes Hjalmar Winbladh and Jonas Lindroth launched Rebtel SA, a company that uses VoIP technology to deliver cheap international voice calls to cell phones. Windbladh could be onto a good idea. The self-described "serial entrepreneur" launched and sold another mobile phone software company called SendIt to Microsoft for $150 million. He was listed by Time magazine as the 10th most influential person in European information technologies.

The Norwegians Jon von Tetzchner and Geir Ivarsy have tapped a successful business in developing Web browsers for mobile phones. The two partners developed the technology initially in the labs of Telenor. But when the Norwegian telco decided not to pursue the project any further, the duo struck out on their own, zeroing in on the gap in the market for browsers on mobile phones. The software of their Oslo-based company, Opera Software ASA, is now used on millions of mobile devices.

Fellow Norwegians Eirik Chambe-Eng and Haavard Nord pursued an equally tough path in launching their software company, Trolltech ASA. When the two went hunting for seed capital for their idea--a mobile phone operating system based on open-source software--they received nothing but rejections. Relying initially on the incomes of their working wives, the entrepreneurs developed the operating system software, brought it to market and last year generated sales of NKr 174. …

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