Ilkka Kivimäki built and sold a company to SAP, was the first investor and chairman of Wolt, and now runs a 180M€ seed fund. We sat down to discuss everything from startup investing and growth to quantum computing and food innovation.
3 takeaways from the conversation with Ilkka Kivimäki
1. Early investing is a gut game, not a consensus play
When you invest at seed stage, there’s rarely enough data to make a purely analytical decision. Ilkka explained that in his fund, it’s not about everyone agreeing around the table. If one partner is on fire about a company, i.e. truly convinced by the founder and the opportunity, they can push the deal through. Early investing is about conviction, not committee votes.
2. Innovation must be sustainable
Ilkka is passionate about deep tech, but he’s clear: even the most groundbreaking idea won’t win if it can’t stand on its own commercially. He highlighted that we can’t rely on “green premiums” or endless subsidies. The future belongs to solutions that are both innovative and financially sustainable: products that compete on cost and value, not just ideals.
3. Support founders beyond money
Writing a check is only the start. Ilkka described late‑night calls, hands‑on help, and being part of the extended team as key parts of his work with founders. The best investors bring operational support, networks, and empathy for the tough moments, not just capital.
Watch the episode:
Podcast transcript
Josua: Welcome. So, uh, welcome to the [00:00:30] show. Thank you. Uh, super excited to talk to you about, um, investing, technology, startups, uh, and all those things. But before that, um, wanna get a little bit into your background. So before you became an investor, you [00:00:45] were an entrepreneur, CEO. Um, we built, I think, two businesses at least, but mm-hmm.
Josua: But one, the, the most recent one, I guess was, uh, y com communications. Mm. So could you just kind of walk through the background? How did it get started? What was it like [00:01:00] scaling that up and what was it eventually like, you know, making the exit to SAP.
Ilkka: Okay. Yeah. Well, actually the, um, everything started already before that, that, uh, I was also, uh, part of the, uh, journey for the PC superstore for the, um, [00:01:15] B2B and B2C computer, um, e equipment and component retailing.
Ilkka: And, uh, during that time, um. We were starting to experiment with the IP telephony systems for the, for the company. And it was kind of a really [00:01:30] no, no brainer to see that, uh, the telephone systems had like a seven year renewal cycle and then all of the, well computers had the seven month cycle and uh, and it was coming super fast.
Ilkka: And, uh, then when, when [00:01:45] the superstore was sold, um, well I was, uh, two weeks, um. Uh, PhD student, but, uh, then had to go back, back to, um, back to business. And, uh, we set up the Wacom communications. Uh, it was, um, [00:02:00] kind of, there was the urge that, okay, this is really happening now. And, uh, uh, the IP stuff is, is really rolling over the old technology and there is so many opportunities and, uh, and uh, um, that, that was just, uh, very exciting.
Ilkka: Uh, the [00:02:15] telecom was, uh, uh, just before the, uh, uh. To, uh, year 2000. It was really in, in a big hype. And, um, and so, um, we actually, uh, focused the company. Of course, while we are finished into the [00:02:30] kind of a most difficult deep tech part, IE the call centers and contact centers, Skype was doing, um, their thing for the consumers.
Ilkka: At the same time, I think that the Nicholas Nicholas was lagging a little bit more money, but I think that we [00:02:45] ended up well also, so, mm-hmm. But, uh, uh, yeah, um, um, we got, uh, the initial funding, funding for the company, um, 99, and then started to fundraise for the bigger one. Then everything started to [00:03:00] unravel and, uh, it was a really, I think that, uh, NASDAQ went from three and a half thousand to, to 600.
Ilkka: Wow. While we were fundraising and, uh, uh, just, yeah, actually it went into [00:03:15] 1,200 or something because then it crashed when the, um, uh, September 11 came. Ah, yeah. And it totally crashed. And so we got funded two months, two months before the, um, uh, September 11. And, and, uh, kind of, I thought that it was tough, [00:03:30] but actually the tough time was just about to start.
Ilkka: Mm. Because then the, uh mm-hmm. Of course, the um, uh, dot com bus and everything, there was, uh, it was really difficult times for many of the companies. And the thing, what we didn’t realize was that, uh, [00:03:45] all of our customers were the, uh, telecom operators and they were running outta money. So we actually had to change everything on the fly.
Ilkka: And, uh, it was a. Very, kind of a tough journey because, uh, many of the choices that we had [00:04:00] made, well, kind of, uh, it was falling apart several times, but every, every year we were able to still grow the company. And, uh, uh, then, um, 2007, we, we decided that, okay, it’s, maybe it’s better to be part of [00:04:15] a bigger company.
Ilkka: And, uh, ended up then part of an SAP. And, uh, that was actually for, for me, that was. Really interesting because being a, a little bit over a hundred people startup, CEO and uh, kind of, uh, [00:04:30] trying to hold pizzas to the coders in the, in the evenings, uh, then suddenly became becoming a senior vice president in the world’s largest enterprise software company.
Ilkka: Where my boss report was reporting to the CEO and, uh, [00:04:45] seeing all of the politics and the a hundred thousand people and everything. So it was kind of a totally the other end. Mm-hmm. Um, definitely not me, but, uh, it was super interesting and, uh, I was learning a lot during that three years that I was there.
Josua: [00:05:00] Mm-hmm. But it was never like, in your mind, the idea of being like long term, becoming like a corporate executive at
Ilkka: Yeah, that’s, I I have to say that that’s. That’s not me. Yeah, I think that, uh, it was super interesting while being [00:05:15] there, but I just couldn’t see myself being there for, for a long time. I’ve been always kind of a, well, actually why, why I left was that, um, um, we had, we had a, um, big project with Deutsche Bond [00:05:30] and uh, there was, uh, also big problems and then I went to the customer and, uh, they were, well, more or less screaming.
Ilkka: And, uh, I kind of felt alive and I realized that I hadn’t seen a real customer in six months. [00:05:45] And that was kind of the time that, oh, Lord, that now I’m becoming a corporate kind of a animal, that I’m just doing some internal stuff and, uh, and not the real thing. And I think that that was kind of the final nail that, okay, I, I need to figure out [00:06:00] what to do next.
Josua: I think that’s interesting. It’s like this idea that if you work in a restaurant, you wanna work in the kitchen where the action is, like, you don’t want to be. Stuck in the back office doing some internal things. You want to be in, you know, close to the customers with a development and actionist.
Ilkka: [00:06:15] Well, it, it’s like, um, I think that there is a different type of personalities, but I’m always, mm-hmm.
Ilkka: I want to be part of the action. I want to be where the new things are created and, uh, and working with the super enthusiastic people that [00:06:30] are really driving for the change. And
Josua: I think
Ilkka: that’s,
Josua: now I’m there. Yeah. I, I was just gonna say, I mean, I guess that was the reason that you started, uh, MKI, I said the, the venture firm that you’re, you’re running now and Yeah.
Ilkka: Well actually the, um, um, when when I quit at, uh, [00:06:45] SAP, then I was actually for four years. Uh, more or less living out a balance sheet. And I was, uh, then at that time, um, was part of the startup sound accelerator at the Al Alto and, uh, helping the Alto [00:07:00] Entrepreneurship Society people, uh, helping to set up the way ventures, uh, helping the, uh, startup apply first.
Ilkka: Junction hackathon and, and then mainly also being part of the show up of how to, how to grow the [00:07:15] slush.
Josua: Hmm.
Ilkka: And I was the chairman for Slush for six years.
Josua: So you’ve seen, I mean, both in, in, during, in time, you’ve seen from, you know, pre.com bubble, how, what the finished startup ecosystem looked like. And now obviously in 2025 [00:07:30] you’ve had access to like slush and all these other, um, phenomenon.
Josua: So what, what’s your kind of. Uh, assessment of the finished startup ecosystem today. Is it very strong? Is it lacking in some key things? Is it, you know, what, what [00:07:45] are the future prospects? Really, really good. What’s your kind of assessment of where we are at right now? Well, I think
Ilkka: that it was, um, thinking the, um, 2009, 2010 when there was a, [00:08:00] just like a, well after the.com crash, there was like nothing.
Ilkka: Really that, uh, they, the more or less the investors were gone and, and just a few entrepreneurs and, uh, then looking what we have today, I [00:08:15] think that it’s a day and night and, and we were just, uh. Talking with some, some colleagues that, uh, like the situation, like how, however, ever bad the economy would go, that this would never come back.
Ilkka: That, that all of the venture funds would be dead and, uh, and [00:08:30] that there would be just handful of entrepreneurs that, uh, now the ecosystem is definitely there. And then, uh, I think that slush has been really. Part of the, uh, big part of, uh, kind of the recognition that, uh, now in the Silicon Valley, [00:08:45] more or less, everyone knows where Helsinki is and, uh, and actually most have also been here.
Ilkka: Mm-hmm. So, uh, I think that that’s a, it, it’s in a totally different shape and I think that we are part of the, kind of a bigger, bigger [00:09:00] ecosystem now in Europe. Um, having said that, I think that the latest geopolitical. Has, it just remains to be seen that how well, uh, or is there some, uh, um, effects on the, between the [00:09:15] US and Europe and uh, uh, and maybe between the countries in Europe?
Ilkka: Because the, um, uh, the more there is uncertainty, uh, the kind of sho uh, uh, smaller the circles come. That you’re kind of [00:09:30] concentrating on, on to, to your core and to as close as possible if, if there is any, any hassles. And I, I think that’s now there has been some hassles. Yeah. On the geopolitics. Hope, let’s hope that it doesn’t get any, any worse than this.[00:09:45]
Josua: Yes. Let’s, let’s hope for, for sure. Uh, given that you’ve been intimately involved with Slush, what was it that allowed Slush to become such a successful phenomenon? Like, probably in its category, the world leading event from, you [00:10:00] know, a little country up in the north, close to North Pole. Like how did it happen?
Josua: I think
Ilkka: that the, um, um, of course it’s the, uh, um, the, the team that was building it, of course, that was the, um, uh, uh, stellar [00:10:15] team. Mickey. Mickey and the, the people that, um, uh, took over. But I think that then there was the, uh. Uh, one thing that, uh, we were able to rally like more or less everyone in the Finn scene behind slush.
Ilkka: So [00:10:30] everybody was supporting it here, whether it was a corporate CEO or or a minister or whomever, that everybody was kind of a thinking that this is a good thing, let’s, let’s, let’s do it. And, uh, kind of a pitching in with, from all of the sides. [00:10:45] And, um, um. Uh, but I think that still, if you go dig one step, um, um, deeper, I think that was the trust.
Ilkka: Hmm. That kind of, uh, um, um, uh, giving the chance for the [00:11:00] students to, to create something new, to make, um, to kind of put your own name in the game Also, um, that, uh, that this is gonna be big and uh, uh, kind of a trusting that it’s, it’s gonna be big [00:11:15] and. Like looking, looking, um, that, uh, you have like a 20 to 25-year-old olds running a 20,000 people event, which is much better than anything [00:11:30] like a professional that you can see.
Ilkka: Uh, that’s just how it goes when, when you have the right team and then they have the, um. A mandate to execute. And I think that that’s really magic. And, and, and that’s the [00:11:45] thing. What the people that are coming in can also feel that it’s not just that the people are working there nine to five, that it’s a passion project for everyone that’s in there.
Josua: That’s really interesting. And it probably is very true that the fact that it’s a student run and it’s run by [00:12:00] volunteers still while being at this massive scale is something that that really contributes to experience. And probably also something that you could not really do in many countries. I don’t think you see an event like that student run, volunteer run in the us I don’t,
Ilkka: no, no.
Ilkka: It it’s, I think that [00:12:15] that’s the Finnish term Dollar court. Yeah. That the kind where you come together and you help help people. I think that that’s something that, uh, kind of a slush is a real incarnation of dollar court. Okay. And it’s been
Josua: massively impactful, [00:12:30] as I’m sure you know better than most people for the Finn startup ecosystem.
Josua: Okay, so after you’ve done, you’ve built a few companies, you decide to start investing, and one of the investments, I’m guessing maybe one of the first investments you made was in a small company called [00:12:45] Vault, which turned out into a very, very big, successful company. Um, you were the first investor, outside investor in Vault.
Josua: Yeah. And chairman of the board for a couple of years. Yeah. First of first four years. Yeah. So what [00:13:00] made you. Um, what did you see in, in, in Volt, uh, that made you say, yeah, let’s do it?
Ilkka: Well, it was kind of a, uh, of course the thing that, uh, uh, at Slush I had been working with Mickey, Mickey and the team and, uh, kind of [00:13:15] seeing the crazy capability of executing and, and kind of a getting, getting things done and scaling, scaling things, and, uh.
Ilkka: Um, at the time of investment, there was very, very little from the business idea side. [00:13:30] Mm-hmm. Uh, but it was just the team and the, the trust that, okay, this is the, the food delivery and uh, uh, kind of everything around it is, is something that’s gonna be big. Yeah. And it was kind of a bit, bit to the founding [00:13:45] team.
Ilkka: That’s kind of a once in a while, maybe once a year, you, you kind of, uh, come across with that. Kind of a individual or, or team where you just say that, okay, this idea might be blah, blah, but [00:14:00] these are just the people that I want to work with and they, they really have the drive. And, and I, I feel like it’s, it’s really interesting and I, well, I think that vault is a really prime story on the global scale on that one.
Ilkka: That how, how [00:14:15] you have the, the really, really crazily good team and, and the execution is well. Now you see it.
Josua: Hmm. Yeah. The execution part is like super, super interesting because to to do what they did must have required some, like really, [00:14:30] I mean it’s a lot of operational excellence.
Ilkka: Indeed. And I think that it was also that, um, while uh, there was always like, uh, one maybe hundredth of the money that was available for the [00:14:45] competition, I think that there was also many strategic.
Ilkka: Um, good choices, uh, uh, in the beginning so that they’re not, not going to compete with, uh, in the markets that, that were the big ones where people were throwing marketing money against each other. [00:15:00] And then the other idea that, um, um, you can’t kill the, um. A company that has the cost, uh, who is the, a kind of the cost leader.
Ilkka: Yeah. Or has the mini, has the most efficient product. And I think that that still holds mm-hmm. [00:15:15] Even though that was already 10 years back, that those, those kind of a principles that let’s, let’s do Blue ocean, IE going mm-hmm. In the markets where there is no competition and actually the, the product that is the most efficient in the [00:15:30] market.
Ilkka: Yeah. And actually combining those. Is, is the thing, while, while it was then able to go into the markets where there were nobody else, and being growing to, to so big that, uh, it was then impossible to squash anymore. [00:15:45]
Josua: Hmm. I think it’s always super impressive when someone has like a, a, a simple, uh, or a clear strategy based on a few key insights, and then they stick with it and execute on it for like years after, years after years.
Josua: Mm. Like,
Ilkka: well, um. When [00:16:00] investing, of course. Um, I think that everybody around the table is sharing that at the time of investment, but then I think that, uh, nine out, nine out of 10 or 99 out of a hundred times, you, you get into different twists and [00:16:15] turns mm-hmm. On the way. But I think that, uh, in a big picture with both, um, it’s been a really, really very good strategy at the beginning and very good kind of execution on that.
Ilkka: And. It was then scaling like hell. [00:16:30]
Josua: Hmm. Did speaking of those twists and turns, um, given that you had, you know, your own background as a CEO founder, you managed a lot of problems and raised money in a very, very difficult, um, external environment. Has that made you a better [00:16:45] startup investor? Um,
Ilkka: I don’t know if why you, why you are asking that from me.
Ilkka: Maybe that should be asked from someone else, but, uh, I think that the um, um. Uh, while we are investing, like we, [00:17:00] we like to put in the first tickets or be very early in the companies, I think that that’s more entrepreneurial and uh, kind of, uh, it’s, um, much easier to relate to to the founders and their situations when you have been [00:17:15] there on your own.
Ilkka: That, uh, um, well, just before we started this, uh, recording, I was, I was, um, um, in contact with one of the founders that has a. Uh, there is tight spot at the moment, um, and, uh, kind of running outta money. And [00:17:30] we are, we are putting, putting a nice, nice package together, together for him. And, uh, uh, kind of a part of the, part of the discussion is also the, the, the question that how, how, how is the team feeling and how is he feeling mm-hmm.
Ilkka: At [00:17:45] that situation, which is very tough. And, uh, I think that that’s something that, that. Once you’ve been on the other side, it’s much easier to relate that if you just have the, if you wear a pinstripe and a tie. Yeah. And look at the Excel sheets.
Josua: And probably [00:18:00] also you have the credibility and trust from the founders because they know that you’ve been in a similar spot.
Josua: I said maybe you should ask somebody else without, bring someone else on. But, um, okay. So with ve, um, what was [00:18:15] the kind of. Insight there that led you to, to found that. And can you briefly describe kind of your strategy and how you’re trying to position yourself, um, compared to other VCs and, and, and what, you know, you, you’ve invested now in 50 plus companies.
Josua: So [00:18:30] yeah. A little bit about the maybe focus areas that you’re currently
Ilkka: Yeah. It would be, um, um, with market, it was kind of the initial feeling was that, um, um, wanting to be in the early stage, writing the first tickets, um, [00:18:45] um. Kind of trying to spot the exceptional founders and, and, and kind of a, well, there is nothing that special on that one, but maybe, maybe the one thing also that kind of a, i, i [00:19:00] stupid to say, but I think that the, not.
Ilkka: Everyone wants to work with those founders, like, uh, that really, really in the late, late at night. And I think that that’s something that we have done a lot, that we’re trying to be part of, kind of the [00:19:15] extended management team and trying to be, um, helping the companies also in the. Late at night and in the tough spots and uh, uh, kind of that, that feeling is something that I, I felt that, uh, when, when setting up m that, uh, kind of a, being part of the, [00:19:30] part of the founding teams is, is one of those things.
Ilkka: And then being super early and, uh, then, um, having. I have a technical background, but unfortunately, um, in the investing side of co [00:19:45] oftentimes the technology is not the one that wins. But also I think that the, um, having, having done the, um, idea that, okay, um, going into deep tech and trying to pick out and understand the companies that [00:20:00] can be.
Ilkka: Kind of scaling rapidly, uh, with the super complex technologies. What, what there are, because I think that those are super interesting companies because if you have a, um, very complex technologies and then you’re [00:20:15] able to scale, it’s very difficult to compete with you. Yeah. When, when you have a very high entry barriers to the market, and I maybe IQM is.
Ilkka: The Quantum Computing Company is one good example of that one that talk about complex.
Josua: Yeah. [00:20:30] Yeah. So I was just gonna say, I mean, when you’re talking about technology, it’s obviously not just software. Um, what, what kind of balance in your portfolio? How much is software versus like, you know, material sciences or like quantum computing or, I, I think that they are
Ilkka: maybe [00:20:45] half, half and half.
Ilkka: But then it’s also the, the question that what, what is, what that, like we have a company, a, a German. Company that is doing, uh, aligners, the, like the invis align the aligners for your teeth and, [00:21:00] uh, uh, the end product is, is piece of plastic.
Josua: Mm-hmm.
Ilkka: But then again, actually most of that is software. Yes. So kind of the, the backend is the secret sauce is in, in the software.
Ilkka: So it, it is kind of a. I think that the [00:21:15] hardware software is maybe oftentimes it’s, it’s not the right question. It it’s kind of because they are very much mixed.
Josua: Yeah. So, well, speaking of that, of that, like what, um, how do you determine which sectors, which industries to focus on? Is it just [00:21:30] when the team is really good or do you need to have you or someone on your team need to have some domain expertise in, in what they’re doing?
Josua: Um.
Ilkka: Well, yeah, fi first of all, I think that, uh, if the, while we are inve, we have a [00:21:45] totally open mandate, so being a master of everything is somewhat hard these days. But, um, I think that maybe it goes the other way around that, um, um, kind of on investing, I feel very strongly that in the, when you are in the super [00:22:00] early stage, that you need to have a very strong view of the world.
Ilkka: Mm-hmm. Yourself, that okay. How does that. World work. How does this, uh, uh, industry is going to, um, uh, evolve and, uh, what are the things that are happening in this [00:22:15] market and, uh, uh, what’s the kind of, uh, incumbent situation there? Or if it’s a totally new that mm-hmm. There is nothing and, uh. And you have the worldview in your head, and then, then you, you see the companies and you [00:22:30] see the teams and uh, kind of, uh, if they all align, then, then you have an investment that I think that it would be, at least I feel that it would be impossible to make investments if you are in the super early stage if you have no idea.
Ilkka: Yeah. Of [00:22:45] the industries or, or, or what’s happening.
Josua: Yeah. So, uh, could you give kind of, um. I think that’s really interesting about having that deep conviction and maybe some thesis of how the world is gonna develop. And I’m guessing you want to get to that thesis, you want it to be correct, of course.[00:23:00]
Josua: Mm-hmm. But you wanna arrive at it earlier than other investors. Indeed. Well, that’s, that’s hard. That’s
Ilkka: the, well, the, the beautiful part is that if, if you’re reading the thing from Financial Times three years later, then you can just say that, well, we are here on the [00:23:15] bus stop waiting for the everyone else already.
Ilkka: Yeah. But I think that, um. Maybe a good example of that is the, uh, the quantum computing that, uh, um, it’s kind of a thing that has been coming for, it’s kind of a. [00:23:30] There is a strong feeling. Okay. It, it’ll come. It’s been there already for 10 years. And then when we made the investment 2000, um, 2019, um, that was just like, uh, months before the Google first [00:23:45] experiment where they showed the quantum advantage.
Ilkka: I think that that was kind of a, the Wright brothers moment for quantum computing that, okay, practically useless. But you can show that it can be done. Hmm. Like, uh, and, [00:24:00] uh, it was before that one. And, uh, there we were really thinking hard that Okay, everyone knows that the quantum computing doesn’t work.
Ilkka: Hmm. That, that’s kind of the known fact on the streets. That, that, that if this thing folds in six [00:24:15] months, that, uh, how, how much money do we dare to put there? That not everybody’s laughing Hmm. Laughing at us, but, uh. Uh, then we decided that Okay. Yeah, the, the team is really good. The feeling is that the timing is, [00:24:30] timing is there that now it, it, it’s kind of, uh, so many advancements have been happening in different sides and, uh, uh, we, we were part of the initial funding round and.
Ilkka: Uh, of course now, now, uh, uh, unhappy that [00:24:45] we didn’t put more in in that time and, uh, seems like the timing was very much right, that, uh, the, the Google came few months after that and, uh, and there’s been now, uh, advancements there and the company has been, [00:25:00] um. They have been delivering working systems in, in four years with the, on the technology space, which is crazily complex.
Ilkka: And I think that that’s a magnificent, uh, um, uh, show that how, how you [00:25:15] can really also kind of, uh, when, when you have the customers and uh, when you have the whale, uh, you can really make really complex things happen. And, um, um. That’s gonna be like the next, next 2, 2, 3 years will be super [00:25:30] exciting for that space.
Ilkka: So, yeah. And then like, uh, talking about kind of a new areas, for example, now, um, today there is not a working quantum computer that would be delivering real quantum advantage and [00:25:45] uh, um, but I’m certain that it will come within the next 2, 3, 4 years. But on that moment. When the first computer works, a quantum computer works that can totally outpace the, [00:26:00] um, um, current computers.
Ilkka: What’s then it’s kind of a opening a door and there is just a white space that wears all the software. I, I need my marketing, uh, uh, advertisement, retargeting, algorithms. I need my, um. [00:26:15] Derivatives pricing algorithms and, uh, I need my, uh, computational fluid dynamics algorithms for my airplanes or missiles or whatnot.
Ilkka: So that explodes on that second.
Josua: Mm-hmm. [00:26:30]
Ilkka: And, uh, that’s something that we’ve been now kind of, uh, looking also that okay, what are those companies that could be finding the next generation algorithms? Of course today it’s a, it’s kind of a crazy bet because there is no [00:26:45] platform to compute on, but, uh, that’s our view that it, it’s so close that now it’s time
Josua: to start that.
Josua: That’s interesting. Um. Re really interesting. So, so you’re saying we’re kind of just a few years out potentially from that. [00:27:00] Um, and for, you know, someone like me, and I think most of the people listening, could you describe what concrete, you know, the concrete benefits of, of quantum computing? Like, is it gonna lead to massive increase in compute?
Josua: Is it gonna dramatically lower the cost of [00:27:15] compute? Is it gonna allow for things that we previously just could not imagine? Or what’s, how is it gonna change society potentially? Well,
Ilkka: that’s the, um, it can be all of those.
Josua: Mm.
Ilkka: But, um, um, I think that, um, [00:27:30] the initial thing is that, uh, you are, um, most probably computing something that was not possible earlier on, that you’re able now to calculate some things, some specific things very efficiently.[00:27:45]
Ilkka: And, uh, kind of a solving problems that were not, you were not able to solve, where you can see the immediate benefit. I think that the kind of adult example is, is from the financial markets that, uh, if you can calculate [00:28:00] some pricings, nanosecond earlier than your competition, you win.
Josua: Hmm
Ilkka: hmm. And then, then there you have an application.
Ilkka: But then, um, in, in the, in the longer run, I think that the, uh, uh, one interesting thing [00:28:15] also, but it’s, that’s, that’s in a longer time space. But, um, uh, the interesting thing is that the, the, um, computing power, uh, grows in a quantum computer into the power of two. Hmm. So in, [00:28:30] in the, uh, um, normal computers, if you need to double your computing power, you need to buy double the amount of servers in the, uh, quantum computer.
Ilkka: If you have, uh, a hundred qubit computer, if you want to double the computing power, uh, the [00:28:45] one qubit more and it has a double computing power.
Josua: Hmm.
Ilkka: So, um. That means that, okay, the computing power goes up exponentially. But the other way around also, that, uh, if you’re able to calculate your [00:29:00] stuff in a quantum computer, the energy, energy consumption is much less.
Ilkka: In the future, but I think that that’s still
Josua: quite far away. Yeah. Wow. That, that’s, uh, really fascinating. So kind of what does the platform [00:29:15] exists, there’s gonna be tons of industries, companies, people rushing to kind of play with the new technology and see how they can apply it. Kind of what we’re maybe seeing with the ai.
Josua: Yeah. Well
Ilkka: I think that the ai, um, yeah. Now I think that AI is, uh, quite similar to internet [00:29:30] that. Um, first there were a few companies that, uh, were adopting it, but it’s kind of a horizontal technology that they, it touches everything. Yeah. And, uh, I think that the ai, it’s making massive changes [00:29:45] to many things or all things, but, uh, as said, I think that, uh, up, um.
Ilkka: I, I, in my head, AI is not separate of everything. Yes. It’s part of everything. Yeah. And it’s just a question of how are you, how do you [00:30:00] apply AI
Josua: in this area so it’s not gonna make sense in the future. Talk about AI startups, it would be like a startup saying we’re using electricity or internet to do our business.
Josua: Yeah. Well, it’s
Ilkka: like as, as sensible as saying that, uh, we, we have these startups [00:30:15] that use electricity in some form. Yeah. Yeah.
Josua: Yeah. Like that’s gonna be a given.
Ilkka: Yeah.
Josua: Um, okay. I wanted to, well, that’s really interesting with quantum computing. One other kind of technology I wanted to talk about was autonomous autonomy and robotics, and maybe you [00:30:30] wanna treat those as separate, but that’s been another, personally for me, like an example of where I was shocked.
Josua: Uh, reading about, uh, Waymo, so Google or Alphabet self-driving car company, they’re doing like 250,000 probably more now. [00:30:45] Drives per week? Yeah. In four cities in the us Yeah. And that means that like functionally, if you live in those cities, self-driving cars are already here and they like, they’ve taken a huge market share.
Josua: And I mean, they’re doing partnership with Uber, but like, do you think that. We’re [00:31:00] gonna see like maybe already this year or in the coming years, like a big rollout of robotics across, you know, maybe an industry, but also like consumer. Um, and yeah. What do you think that’s gonna look like?
Ilkka: Well, um, talking about the timing and, [00:31:15] uh, time, time lapses.
Ilkka: Um, um, I was investing 2014 into a company called AI Motive in Hungary, uh, that, uh, made, um. Made actually very similar stack, uh, software stack, um, uh, for [00:31:30] the self-driving cars as what Tesla is using today. It was sold to tel this, um, two years ago, and, uh, um, it was 2014. My view was that in, in five years, uh, the self-driving will be, will be [00:31:45] here.
Ilkka: Well now it’s 10 years and it’s almost here. Mm-hmm. Because if you’re looking the, the Waymo way that how they are doing the self-driving, it’s, it’s kind of a. What, what I call the Pacman style. Hmm. That you have a [00:32:00] matrix that you know, and then you’re just driving your car in that matrix. Uh, where, where you know, everything like the, the way that the Tesla is trying to do it is that okay, you can, uh, that you think like a human and, [00:32:15] and you can drive wherever.
Ilkka: And, uh, that’s like way, way more complex than how the Waymo is doing it. Uh, so I think that with the autonomous things, um, it’s kind of the same, [00:32:30] the same, uh, steps that, uh, you get the first, um, some specific tasks where you can use the autonomous technologies and, uh, uh, then kind of, uh, over time you, you get to the more, more generic [00:32:45] things.
Ilkka: And, uh, I think that the Waymo taxis is a really good example of, of that, that you have a kind of a limited functionality, even though it’s perfect that if you have a taxi service in one city, that’s already a very big, [00:33:00] big, big application. But, um. I think that there is, um, um, um, combining AI, robotics, um, all the other self-driving technologies or, um, autonomous technologies, I think that that’s [00:33:15] a super powerful combination and uh, um, and I think that in the industries we’re going to see a lot, lot of, lot more of the autonomous things and, and kind of a much, much faster.
Ilkka: Faster tech cycles. Uh, [00:33:30] I think that also, unfortunately in the military tech, we, we are seeing already quite a lot of that stuff. And uh, um, like last night I was talking with, with one company that had a super interesting. [00:33:45] Stuff on that side where, where the, uh, everything kind of, all the hardware is really a commodity stuff that you can hold, uh, get from everywhere.
Ilkka: But then having the mother brain that, that is controlling, controlling everything. And that’s kind of a, [00:34:00] the scenarios are quite dark. If you are looking from the, from that side, like in the, that what kind of, uh, autonomous things you can, you can build and. Kind of a, I I think that, you know, if you know the [00:34:15] Boston Dynamics robots and, uh, um, I, I’ve seen, seen those a few times live, and it’s not fun when it starts to follow you.
Ilkka: And, and you can see the rails in the back of it and wondering that, okay, [00:34:30] what can you attach to that one? But, um, I think that, uh, there is opportunities on kind of a, the spectrum is really wide and. And, um, um, but actually the one thing where I think that, [00:34:45] um, there is a, uh, on the automation side and on the robotic side, there is a really big help will be, um, uh, in the elderly care.
Ilkka: Hmm. Because that’s, there is a so many old people in the, [00:35:00] whether it’s European countries, us, uh, especially like Japan has, has those issues. And I think that there. There, there is a, um, if you can take away some of the repetitive tasks from the, from the [00:35:15] nurses and uh, from the caretakers, I think that, that, that is something where there is a huge need.
Ilkka: Hmm. On all of that, that kind of stuff. Yeah.
Josua: I think that that’s just endless. Yeah. Yeah. [00:35:30] I think that’s, that was probably like, because you’re working, uh, with companies that are at the cutting edge of technology and you can see all those. Uh, potential applications good and bad. Good and bad. It must be very hard to kind of keep everything kind of, uh,
Ilkka: yeah.
Ilkka: It’s like, uh, a lot of, yeah. At, [00:35:45] at times it’s overwhelming. Yes. That, uh, when, when you’re kind of, uh, thinking that what can be done. Yeah.
Josua: Yeah. So. Let, let’s go to another one actually, because I, I know you’re kind of, uh, a little, at least a bit involved in materials sciences, [00:36:00] material innovation, and I think it’s something that probably is not talked about, um, quite, quite enough given that I, I don’t know a lot about it, but it feels like there’s huge potential and you make some breakthroughs there.
Josua: It could have like huge societal consequences. So [00:36:15] any, any kind of area in that that you think is really exciting? Well, I think that that’s,
Ilkka: that’s actually, I think that the. Um, well, several things. I think that the, the first one on the materials, I think that is food. I think that the [00:36:30] food is also part of the, uh, material space.
Ilkka: And I, I, well looking at, um, like we have a company called Ongo Bio, which is doing the vegan egg white, uh, and, uh, without the chicken chickens. And, uh, [00:36:45] if you’re looking the process, how you today produce eggs, I think that, uh, from the. Sustainability point of view or ethical point of view, or any other point of view that’s totally not sustainable, the whole thing.[00:37:00]
Ilkka: And uh, um, kind of if there would be viable options for that or any, any kind of a, uh, meat production or protein production, I think that that’s something that, uh, will change and should be changed kind of, [00:37:15] uh, as fast as possible. And, and the, the food. Food is, um, um, the, the volumes are just crazy. Yeah. Uh, that’s something that, uh, in many industries you think that the, the billion, billion is a big [00:37:30] number.
Ilkka: You’re going to food and it’s a trillion. Yeah. Yeah. It, it’s just, yeah. Massive numbers. So that is something that, um, I think that, um. Uh, there will be a lot of change. There is a lot of opportunities. I think that there [00:37:45] was some kind of a boom five years ago, but, uh, maybe not the right companies. Yes. Got the money, but I think that now it’s kind of a, the hype is over and now the real, real building starts.
Ilkka: Yeah. Um, and then, [00:38:00] um, kind of on the, on the really ordinary materials side, I think that there is also. Uh, the AI will actually be, bring on the kind of a molecule, um, [00:38:15] discovery, et cetera. There will be totally new ways of doing things and, uh, I think that that one has not even started yet. So kind of a, finding the new materials for our everyday life, et cetera.
Ilkka: I, I’m, I [00:38:30] don’t know, but my feeling is that there will be something. Mm-hmm. Quite interesting coming from that side also, that when, when the. Different chemical companies can really kind of start to innovate with the super, uh, uh, like a [00:38:45] late with the latest tools because many of the material, or many, many of these kind of industrial big conglomerates, they, they are doing the same thing that they did.
Ilkka: Yeah. 50 years ago. No change, but, um, I, I am kind of [00:39:00] a positive. I’m optimistic that there is a very much, the, the question there is then that, uh. Is that the startup game? Yeah. Yeah. Because it, it might be, might be so that the, uh, the bits that you need to put on a [00:39:15] table are very big. Yeah.
Josua: But so you can see a future where using ai we start to reimagine like pretty much all the materials around us to make them lighter, cheaper, more safe energy.
Josua: Yeah. Everything. Yeah. Yeah. That’s really, [00:39:30] and, and the company mentioned, um, the, the, the start of the egg protein. I mean, if I remember correctly, they’ve already, they’ve. And now plans to build a, a factory in the us So that’s, yeah. Where is that like soon to be the market? Like are we gonna see that very [00:39:45] quickly?
Ilkka: Um, I think that it’s still, actually now, I don’t know the actual plants, but I think that’s like a two years away.
Josua: Okay. Yeah. Well that’s, and it’s, is it kind of on a molecular level? The same as like an egg protein? It’s
Ilkka: the bioidentical. So you can’t, [00:40:00] you don’t which one is, you don’t know which one is which.
Ilkka: Okay.
Josua: Wow. So that’s because there’s still so many people in the world who suffer from, um, lack of, uh, malnutrition. Hmm. Uh, and if you were able to deliver like really top quality protein and [00:40:15] nutrients in a very low cost way, that would change.
Ilkka: Yeah. A lot. That’s also, yeah. There, it’s just opportunities.
Ilkka: Yeah. I think that on that side and, uh, and also the kind of, the waste of the natural resources, what. Yeah. As we see [00:40:30] today with all of the meat production and everything, I think that that’s just opportunities. I think that all of the environmental stuff has been in the background for the last two years now.
Ilkka: Yeah. Yeah. But I, well, the need is still there. Yes. And we, we just [00:40:45] need to, need to move into the next, next wave. And well, the one thing which is there on, on all of these kind of a new, new things and materials is that, uh. There is no green premium or mm-hmm. There is no, it, [00:41:00] nothing can cost more.
Josua: Mm-hmm.
Josua: Yeah. It’s
Ilkka: just a question that you need to find the, uh, the efficient ways and you need to, the, the price points need to be right. Yeah. And, uh, because that, I think that was a somewhat delusional few [00:41:15] years back when people thought that, okay, this is green now, it can cost three times more.
Josua: Yeah,
Ilkka: I think that that the only place where that has been true is on the military tech.
Ilkka: Yeah. That if it, if it’s green and it’s military, then it’s three times more expensive. But I think that even that one is going away.
Josua: Yeah. [00:41:30] Yeah. I just to speak of that, I, I read, read some guy who said that he used to work for one of the big commodity companies in the US and they had like a biofuel product or something like that.
Josua: Yeah. Uh, did a business case for it and presented it to the like management team. And one of them asked like, how much of our profit that EBITDA is [00:41:45] actually, like if you, if you exclude the subsidies, what’s the profit is like, it’s negative 200%. Yeah. And you’re like, okay, let’s not mention that. Let’s just go ahead.
Josua: So they’ve been doing that. And because California still pays the subsidies. Mm-hmm. They’re building this and, and there’s no, or they’re producing this [00:42:00] stuff and there’s no incentive to make it more efficient because that, that’s,
Ilkka: that’s not how it works. Yeah. It, it’s any business that’s, that’s built on, um, on the, uh, kind of a regulation [00:42:15] or, or some subsidies that’s gonna be killed.
Ilkka: Yeah. Eventually, if you don’t, of course. Early, early on in initial stages, yes, it can be super expensive, but you need to have that cost down visible when you have the volumes and scales and the new [00:42:30] generation. So otherwise it’s guaranteed to be dead.
Josua: Yeah. And, but that probably gives you, like, as an investor, a lot of confidence when it’s a team is saying, we gotta a product that’s better.
Josua: It’s also, uh, time. With time, it’s gonna be cheaper.
Ilkka: Like that. That’s the only, yeah. That’s the only type [00:42:45] of a company where you can invest. Yeah. And that’s, I think that um, once upon a time, there were so many replacements for plastic. Yeah. Or what people said that, okay, we have this beautiful thing. But then when you’re asking that, okay, how [00:43:00] much.
Ilkka: Does the raw materials cost for this one, and then, okay, what are you replacing? And it’s like, okay, the raw materials are three times more than that. Replace the stuff that you’re replacing that okay, next. Yeah, it’s, it’s unfortunate [00:43:15] because, well, there is a great materials, but you, the, the price is really driving the volume adoption.
Ilkka: There is no, there is no exceptions to that.
Josua: Yeah. Um, could talk a lot about different technologies, but [00:43:30] also wanna get time for some personal kind of business investment philosophy. Um, so, so, you know, given that you’ve been in this game for a long time, is there something that you used to believe about business investing startups growth for a long time, but you recently, last few years or [00:43:45] so, changed your mind about, um,
Ilkka: maybe, maybe not that much.
Ilkka: Um, it’s kind of a, the idea that kind of having. I seeing now a few times happening is that, uh, how the, [00:44:00] how it’s so important that the, um, the owners of the company are very much aligned with the vision of the, uh, uh, management team and, and kind of, uh, are willing also to take the risk together and [00:44:15] sounds super self-evident, but then seeing that in, in real life in, in the startups, I think that it’s kind of a.
Ilkka: Quite easy because it’s kind of everybody’s leaning in and, and trying to make the, a leap forward. [00:44:30] But, um, but uh, um, then going into the more established companies, that’s very oftentimes there is a very different views on the ownership side that how the company should be run or should I get my dividends.
Ilkka: Like I got for [00:44:45] the last 50 years and, uh, when the, um, many, many, um, or the environment is changing, I think that it’s very dangerous for companies to be in a standstill, that you should be always on the move and, uh, are kind of trying to develop things. I think that that’s something [00:45:00] that, uh, have seen many times and, and kind of a super simple thing, but, uh, how important it is to be.
Ilkka: Be sure that everybody’s. On the same journey. Yeah. And, uh, um, [00:45:15] and, uh, maybe, maybe one thing from the last six months is that, um, looking at the, um, um, the tools on the AI side that, uh, how, how capable the systems are now. Mm-hmm. And, uh, how, what, [00:45:30] what’s the pace of the development and, uh, like for example, the, um.
Ilkka: Um, the quality that, that you can already today get, uh, from the coding, coding side, from, from the different, um, uh, AI systems [00:45:45] and, and where we are going when it’s tomorrow. And, uh, uh, this time, two years from here, uh, that kind of a. Seeing that, that, how, how does the software evolve if it’s kind of a, so, [00:46:00] so easy to do, even the more complex systems and, uh, kind of that, where, where do you get the, um, um, where is your, um, kind of a, the defensible place in the ecosystem in, in the different software [00:46:15] sectors?
Ilkka: And I, I think that that’s something that I. I felt that it was quite static for a long time, but I think that now everything’s in, in, in flux on Yes. On that, that, that, okay, how does this really go?
Josua: Yeah.
Ilkka: Yeah.
Josua: That, I mean, as someone who I, I am [00:46:30] not following the space actively, but just seeing kind of from the, the parameters what’s happening.
Josua: It’s, it feels like there’s a lot. Yeah. Um, okay. Uh, next one is, uh, kind of a personal. Favorite from fellow, one of your fellow or like another investor, [00:46:45] Peter Thiel, uh, asked about, you know, do you have any contrarian beliefs about startup business investing that most of your peers would, would most likely disagree with?
Josua: No.
Ilkka: Well, that’s again, the thing that maybe should be [00:47:00] asked from somebody else, but at least the one thing I’m I. I feel strongly, and it, it’s that, um, if you are in the super early stage investing, it’s the, um, um, it’s not a consensus game. It, it’s not something that you’re [00:47:15] voting with the team that, uh, uh, that, uh, if three, three out of eight is okay, then we do the investment.
Ilkka: Um, uh, somebody needs to be like, uh, inflamed. Somebody needs to be super enthusiastic, somebody. [00:47:30] Need to be kind of a, um, wanting to defend the companies that you invest until, until the end. And, uh, um, not everyone needs to agree with that, that of course everybody in a team has [00:47:45] the, has the obligation and right to be opposing and, uh, trying to punch holes into the, into the business cases.
Ilkka: But if, if, if one of the. Partners want to do a case and after trying to punch the hole, still, still [00:48:00] once I think that that’s, that’s the way you need to go because the consensus, uh, in the early stage, uh, it just gives you the middle of the road stuff. Yeah. And, and the early stage investing is not the middle of the road.
Ilkka: The further [00:48:15] down the line you go then, then you’re kind of, uh, piling in on the. Winners. But in the super early stage, it’s kind of a, finding the new ideas, doing the controversial things, and not everyone can be thinking the [00:48:30] same way on the controversial things. So I, I think that that’s, that’s one thing that is baked really deep, at least into my thinking, that it’s individ individual things.
Josua: Hmm.
Ilkka: Are
Josua: there. Very early VCs that, uh, [00:48:45] have a different approach there. Like they’re more consensus based or they have
Ilkka: No, I think that there’s also, um, kind of a thematic people that mm-hmm. Are investing into certain type of things and, uh, uh, whether it’s, uh, enterprise software as a [00:49:00] service or, or these days, um, AI on some areas.
Ilkka: And I think that that’s also. That’s a totally different way of doing it. That kind of a, that you’re placing a lot of bets into some area where you think that, okay, this area will, [00:49:15] will be really big. And uh, while I don’t know which one of these wins, then I’ll just put 15 bets here and let’s see which one wins.
Ilkka: Hmm. So I think that there is a different, different type of strategies there. [00:49:30]
Josua: Okay. Final question. Um, given that, I mean, your job today is about making decisions and you have to use a lot of judgment. You can’t just look in an Excel sheet and say, okay, this company is gonna have a higher IRRR, whatever. Um, it’s a lot about judgment.
Josua: Judgment [00:49:45] about industries, about people, about the future of these people and industries. Um, what kind of mental models do you use? To make those decisions because, you know, the human brain can only gather so much information, and at some point you have to make a decision. So you [00:50:00] have probably some ways to kind of simplify this massive, complex reality and into actionable decisions.
Ilkka: Well, it’s kind of a, the companies and the, the teams and the products and the markets are very different than the, um, [00:50:15] kind of a. Having, having some kind of a model where it gives you points that, okay, everything over 70 is an investment and everything under is not. I think that, that it doesn’t work that way, but you are kind of [00:50:30] a, always thinking about the kind of the macro thing around the company that, okay, how does this industry work and, uh, uh, everything in, in a big picture Then.
Ilkka: What’s the product? Um, uh, what’s the go-to market [00:50:45] and the competitive situation in that market? And then you look at the team and, and kind of, it’s, it’s a cliche, but it always boils down to the people that, okay, uh, this is the task. What the people say that they’re gonna do that, [00:51:00] are they the right people to do it?
Ilkka: Mm-hmm. And, uh, uh, or do they really have. Have the, uh, um, capabilities there. Of course, no, no team is perfect on a day one, but then, then they need to grow and get, get more, more [00:51:15] expertise in different areas. But that’s, that’s kind of the thinking of the different, different parts of it. And then in the end of the day, it’s always kind of a gut feel if it’s yes or no.
Ilkka: Because then if [00:51:30] everything looks perfect, then you’re kind of super scared that mm, this cannot be,
Josua: it’s good to me too
Ilkka: that, uh, yeah, because there is very seldom that comes this kind of a thing that, yeah. Which says that, okay, every. Every single thing is Yes.
Josua: Yeah. [00:51:45] Yeah. So it’s, it, it’s, it is about kind of, you have that initial gut feel, you probably get it within the first minutes or 10, you know, dozen minutes talking to the team and then going out and validating that gut feel by checking, you know?
Josua: Yeah, yeah.
Ilkka: Indeed. And then, then it’s also [00:52:00] the, I think that, um, the interesting things are, are like, um, that how can you develop the market, like in the, in the case of IQM. Hm. The quantum computers doesn’t exist, but [00:52:15] everyone knows that if it exists there, there will be a market in the vault case. Some people were saying that, uh, the food delivery market in Europe is so small that you don’t have a chance.
Ilkka: Well, it’s kind of small when nobody’s [00:52:30] doing it. Yeah. So being able to grow it and, and kind of trying to think really that, okay, which way is the market and the, the big picture going? And can we kind of, uh. Create the momentum or can we write the momentum? And, [00:52:45] uh, that kind of a things that are not, not clear if, if you’re just looking the Excel sheet.
Ilkka: Yeah. That, okay. What’s the static situation
Josua: here? Yeah. So it does take a lot of judgment and creativity and that can Yeah. Yeah.
Ilkka: Yeah. And there is [00:53:00] a. The wrong decisions also. But this is unfortunately, that’s, that’s part of the, part of the business that not everything goes as planned.
Josua: Yeah. It’s a power law distribution, I guess when it’s really early stage.
Josua: Yeah. You need to find those outliers. [00:53:15] Indeed. Indeed. Uh, it come. I really enjoyed our conversation, so thank you so much for coming on and I would love to have a follow up conversation maybe, you know, sometime next year or something like that. ’cause I think, you know, with the things we talked about, it’s moving so quickly mm-hmm.
Josua: That, uh, [00:53:30] that you can, you could probably do on every, every month or so and, and always have something new to talk about. So. The same questions you have. Totally different Yeah.
Ilkka: Discussion next year.
Josua: Exactly. I’m sure. Exactly. So, um, you know, best of luck with, uh, everything that you and the team got [00:53:45] going on with your portfolio companies and, and, you know, pushing these new technologies and services to market.
Josua: ’cause uh, it’s obviously a lot of work and a lot of grit and a lot of sleepless nights and I think it’s really, um, it’s actually really, really important work for the, the world. I mean, these innovations [00:54:00] can change, uh, the lives of people for the better. Um, also maybe for the worse some of these applications, but generally for the better in, in really dramatic ways.
Josua: So, um, best of luck with everything
Ilkka: you’re doing. Well, thank you. And I think that, that, that’s really the thing, especially today, that there is a [00:54:15] kind of, the pace is really fast and, uh, it needs to be really fast. Yeah. To make the change. Hey, thank you for the opportunity to come.