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Episode #46

Jyri Engeström is a startup expert, having sold his company to Google and invested in numerous unicorns. We discuss opportunities and technologies, lessons learned from Silicon Valley, and how Finland (of all places) could become a leading global startup hub.

3 takeaways from the conversation with Jyri Engeström

1. Characteristics of a Successful VC Investor

Jyri Engeström emphasized that the most successful venture capitalists often possess a strong entrepreneurial background themselves. This perspective is based on a study discussed in the podcast, which indicated that VCs who have been successful founders tend to perform better in identifying and nurturing startup potential. The rationale is that these individuals not only bring capital but also invaluable experience and a robust network, enhancing their ability to guide the startups they invest in. Furthermore, Engeström highlighted the importance of having a “prepared mind,” which allows investors to recognize and act on opportunities quickly and effectively.

2. Elevating Finland as a Startup Nation

Engeström provided a detailed view of how Finland could become a more vibrant startup ecosystem. He noted that while Finland has a strong foundation in tech and innovation, it requires more active and strategic investment from local venture funds and the government to elevate its status as a startup nation. This includes attracting foreign talent and investment, improving the entrepreneurial visa policies, and enhancing the local VC scene’s connectivity with global markets. Engeström also suggested that Finland could benefit from increasing its pension funds’ allocation to venture capital to boost the local startup economy.

3. The Strategic Value of Networking in Venture Capital

A recurring theme in Jyri Engeström’s discussion was the critical role of networking in venture capital success. He pointed out that being a successful VC isn’t just about picking winners but also about being part of a network that includes other VCs, founders, and tech influencers. This network provides access to deal flows, shared expertise, and collective investment opportunities, which are essential for spotting and supporting the next big innovation.

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Watch episode: From entrepreneur to startup investor

Podcast transcript

[00:00:28] Josua: Welcome to the show.

[00:00:30] Jyri: Thanks. It’s great to be here.

[00:00:31] Josua: Um, I was very excited to, as I was preparing to this, cause there’s a lot of questions that I want to ask you, but, um, around startups and investing and, and, and all that. Um, but I’d love if we could a little bit, go back first to your beginnings. Uh, you founded a company, I think it was in 2007 called the Aiko.

[00:00:49] Josua: Which you in, um, in less than two years, you sold to Google. Um, and, and I think at least then in 2009, Google was like the, the most innovative, most sophisticated tech company. Um, and, and so can you go through a little bit of like, what was the, what was the, the idea that led to Yoico and what was that whole process of like building the app very quickly?

[00:01:12] Josua: Um, and then exiting to Google in such a short time.

[00:01:16] Jyri: Sure. Um, Obviously the world looked different then, but maybe not that different. Um, I, I worked at Nokia on a phone, um, like an internet phone that it grew evident wasn’t going to, um, be successful. And so I left to, uh, start the same, but as a software only app.

[00:01:41] Jyri: Um, you would call it now. Um, and, um, teamed up with, um, my friend and even, you know, current partner Petteri Koponen and Mika Raento, Teemu Kurppahu, who is now CTO of Oura. Um, and, uh, Juha Teränen, Andy Smith, a few other really talented people, Mikko Hypponen, um, who actually is not the security Mikko Hypponen, but a designer who designed, um, the user experience.

[00:02:12] Jyri: And so it was a, um, you know, a small team and, uh, I think what happened was, uh, it grew quite fast. It was, um, right around the time that Facebook and Twitter, the two key competitors also got founded. And, um, we ran out of money because at the time it was not possible for a company that didn’t seem to have a business model because the business model was based on ads, which we all now know works at the time.

[00:02:45] Jyri: It wasn’t apparent to. Uh, investors that this was, uh, possible. And so, um, we had to sell the company because we couldn’t raise enough capital to keep going as a funded business. At the time, there were, uh, Venture capital firms in the U. S. that funded our competitors, but at the time they weren’t really investing in Europe yet.

[00:03:10] Josua: Got it. And I saw some graph on some blog post that detail like the Twitter user account versus Yiko’s user account. I don’t know if it was legit, but it, um, it seems like you were really, I mean, kind of going neck neck with Twitter in terms of growth. Yeah. Which is I think, I mean, people don’t realize that at the time because it was still such small scale.

[00:03:30] Josua: Twitter was as well.

[00:03:31] Jyri: Right. Yeah. Yeah. I mean, these, um, platforms probably only had some hundreds of thousands of users at most. And so, yes, it was the early days, and yeah, um, I think it just, um, it’s testimony to the, the power of, of financing. Sometimes you need access to capital in addition to having a great idea and a good team.

[00:03:54] Jyri: And that was the part that I think caused, um, you know, Facebook ultimately to win over Twitter and Jaiku. Yeah,

[00:04:02] Josua: yeah, I want to get back to those parts about financing and team just when it came to you to do so Google bought you and then I guess it was folded into what became Google plus that how it kind of worked.

[00:04:13] Jyri: Our team was brought in for, um. A specific job, which was to build out a mobile first competitor to Facebook. And, um, we initially rejected Google’s acquisition offer. We had acquisition offers from several other companies as well. Um, until Google, um, showed us a prototype of Android, which had not been launched yet and wasn’t in, you know, generally people didn’t know Google was working on a, on a phone that was going to compete with iPhone having worked at Nokia.

[00:04:49] Jyri: I could see that it was a winner. And so it seemed reasonable at the time To, that this would actually outcompete Facebook. Uh, cause Facebook was a website, it did not have a mobile angle at the time. We were all about mobile and so we knew that mobile was gonna be the winning user interface Um, and being able to build something that would become the de facto operating system and build it into that, um, seemed like a reasonable bet.

[00:05:21] Jyri: So we went for that. What ended up happening was, um, Google couldn’t launch Android this way because it got rejected by the mobile operators that still had a lot of power at the time. And so, there was a big project inside of Google called de googlifying Android, which basically ripped out most of what we were building in addition to all of the other Google apps.

[00:05:46] Jyri: Turned Android into a more generic operating system.

[00:05:51] Josua: Got it. I, I didn’t realize, realize that. Um, what was it like? Just you kind of briefly, as I mentioned, like Google, at least at the time was seen as this, like the pinnacle of success and most innovative and most sophisticated. What was it like then running a product?

[00:06:05] Josua: I think you ran product team inside Google. Did you, any like lessons that you picked up on or was it? kind of big bureaucracy like most, most big companies?

[00:06:13] Jyri: Um, I found it super depressing cause I was working on something that I, you know, um, felt wasn’t gonna win. Um, especially after this, you know, sort of pivoting of Android into, um, into what, what ultimately shipped.

[00:06:30] Jyri: And so also, I think, you know, at the time, Google had a pretty misinformed approach to social. And so I actually quit before. The product that I, I led launched, um, before this, you know, Google plus Google buzz, whatever they called it. Um, even the name was I think very unfortunate. And so, yeah, so it was, it was, you know, I felt like, you know, like I had, you know, my balls had been cut off cause I couldn’t really do anything.

[00:06:59] Jyri: Um, and so I had to, had to leave and I started another company and it was, um, a little bit, Of a cognitive dissonance because I think from the outside it looked very Um exciting and and you know, um, like a great outcome, but then on the inside it felt like wow things were You know going badly wrong and I wasn’t really able to at the time, you know do much about it I was later google came back and um proposed to acquire my second company and it would have involved me going back into Google plus again, but at the time Chose to go another path because I didn’t want to go back to that.

[00:07:38] Jyri: I mean, you know, it’s just I think it was also an unfortunate time to be at Google Google was still still being run by Eric Schmidt and the founders were A little bit checked out later, Larry Page came back to be CEO and obviously now Sundar who’s awesome. I remember Sundar well from my days at Google and, and, you know, I think that also played into it that it just happened to be at a time when Google was, you know, um, maybe as a company, not at its most innovative.

[00:08:12] Josua: Yeah, it’s interesting. Like you said, from the outside, it looks like this fairytale, like this best possible outcome. Um, but like you said, it can, in reality, it can look quite different. Um, so then you did the other startup, uh, Ditto, which ended up selling to, to Groupon.

[00:08:26] Jyri: Yeah.

[00:08:26] Josua: And, uh, after that you had maybe some other projects or when did you get involved in VC?

[00:08:32] Jyri: I started angel investing out of the money I made from selling Jaiku to Google. Yeah. And I invested in companies like aura, um, amplifier, which is now unity. Um, and a bunch of other companies that, uh, some of fortunately, which have done super well since then. And, um, I, after doing two companies and selling them, I thought maybe I should, um, you know, try this investing thing.

[00:09:03] Jyri: And so I worked at true ventures who had originally led, Actually, we, we discussed, that was funny. It’s just last week, Phil Black, founder of True Ventures was here in Finland because, um, we continue to collaborate and co invest. I think True. Um, when I joined true became pretty quickly became the most active Silicon Valley venture firm to invest in Finnish companies, because, you know, I think I wrote maybe five or six checks into companies like I saw, um, um, there’s a company called now called MediCorp, which is a gaming company.

[00:09:40] Jyri: Um, it was called something else at the time. Um, and a bunch of other companies, uh, including musician, for example, that true backed and, uh, yeah, so that collaboration still continues today. And, um, I think what I realized after sort of, you know, practicing investing there for a bit and learning about being a fund manager was that this.

[00:10:03] Jyri: You know, actually I like playing midfield and I still, you know, I still start companies occasionally And and now I can back them myself. And so it’s I think it’s you know, what I call like a dual threat Founder and investor that role fits me. Well,

[00:10:21] Josua: okay. Yeah His name Trey Stevens, I think at founders fund It’s one he co founded Andrel and also, I guess that’s at founder fund founders fund.

[00:10:32] Josua: That’s fairly common that they’re active as as both Partners and investors Investors and founders. I mean,

[00:10:39] Jyri: I think that many of the funds you find folks like that Andreessen Horowitz Kozla Um, pretty much all of the strong early stage funds that people don’t really recognize so well outside of the valley.

[00:10:56] Jyri: Um, you know, So it’s a very common, common thing that they are being run by founder operator turned VCs.

[00:11:06] Josua: Got it. And I think in your podcast, you mentioned there was some study that they had done and showed that the most successful VCs are the ones with a entrepreneurial background. That’s

[00:11:16] Jyri: right. I think that particular study.

[00:11:19] Jyri: Had noted that it’s specifically the entrepreneurs who are successful, who become successful VCs. Um, the founders who fail were actually less likely to succeed as venture capitalists than People who became venture capitalists who did not have a founder background. So I think what you want is a successful founder,

[00:11:45] Josua: Yeah. And you mentioned, I think, the halo effect as a potential that would explain both the success successful being successful, and the not so successful. No one really wanting to work with them, even though they might be very skilled, uh, investors or operators.

[00:12:00] Jyri: Yeah, I mean, I look, I think obviously, um, lies, damn lies and statistics.

[00:12:05] Jyri: I’m sure there are many failed founders who have made, uh, have been successful as investors. And also it’s, it’s important to recognize that for every success that a particular founder has had, they’ve probably had 10 failures. Uh, But yeah, I mean, I think it seems like a reasonable expectation that having someone who has already made money, and that’s the other thing people forget, especially in Europe, is VC, really, it’s for people who already have money.

[00:12:34] Jyri: Um, because you have to deploy capital. Um, and it’s, you know, at least in the US, um, it’s expensive to be a general partner at a VC. You must invest in your own funds. You typically are an active angel on the side. Um, You invest, like, I don’t know, we’re probably LPs and at least a dozen of our peers funds.

[00:12:56] Jyri: Um, you know, it’s not for someone who, you know, starts from scratch with an empty bank account.

[00:13:03] Josua: Yeah. Yeah. And it’s, I mean, obviously it’s very illiquid as well. So that plays a role. Um, okay. So going back to when you started doing angel investing and you mentioned Aura as one of the first examples, what was kind of your, methodology when it comes to came to scouting and finding the good investing.

[00:13:19] Josua: Like, did you have certain criteria they were looking for or how did you, for instance, pick out aura as a, as a, um, good investment?

[00:13:27] Jyri: I think these things, uh, are a function of your, you know, access to just smart people. Um, everyone has their own way of getting there. I don’t think there’s one recipe of success.

[00:13:43] Jyri: In being an early stage investor, but I think some of the commonalities these people share are that, um, they tend to be, uh, people that have the ability to win the respect of intelligent people. Um, and importantly also earn the appreciation of honest critics. So it’s generally people who are smart and who aren’t too smart, meaning.

[00:14:13] Jyri: That they have some sense of, I don’t know if humility is the right word, but at least they don’t take themselves too seriously. Um, and so they tend to attract other smart people and then you just pull on these networks and that’s how you end up coming across folks that have a great idea. And then sometimes you can catalyze them to, you know, Take that idea into action and turn it into a company.

[00:14:45] Jyri: I think which is the ideal scenario for an investor. Cause then typically you become involved right from the beginning, you become involved even before the thing really begins. Cause you’re there to start it and give it a name, give it an idea, found the company, seed it with the first check and so on. Um, that’s what I like doing.

[00:15:08] Jyri: That’s what I focus on.

[00:15:10] Josua: And so if the idea is very critical there, how do you go about evaluating an idea, especially at the early stage, if you take something looking at your portfolio, now you’ve got carbon removal, you’ve got AI, you’ve got supersonic travel, um, a lot of these very electric autonomous drones, etc, etc.

[00:15:28] Josua: So a lot of these very advanced technologies. Novel new technologies. So how do you evaluate when you’re sitting across from a founder, if this person is crazy or just really ambitious and see something that’s really way ahead of the curve? Like, how do you evaluate if it’s feasible what they’re talking about?

[00:15:43] Jyri: Yeah, I think a lot of that happens before you ever end up sitting across a person who was possibly a founder. Um, okay. You know, and I was just at lunch with someone, um, another investor. Before we, we met up here at the studio and we were talking about a mutual friend and colleague of ours, Petteri Koponen from Lifeline Ventures, who I’ve mentioned this on our own podcast.

[00:16:11] Jyri: You know, I tend to call him the, the Leo Messi of European venture capital. Cause if you’ve ever gone to see or watch the game on TV, Where Leo Messi is playing soccer or football there are times when you tend to just kind of you know stop Looking at him because he seems so lazy He’s just kind of walking around sauntering on the field Sort of looking distracted and lazy and you’re like who is this guy like he must be so full of himself Because he’s such a big star that he’s not really even You Paying attention to the game and so you turn to talk to your friend who’s sitting next to you on the bleachers I’ve had this happen I’ve gotten to see a bunch of Leo’s games and you know I reach down to take a drink sip from my coke or whatever and then without realizing it suddenly everyone or the crowd erupts And cheers because Messi just scored While you weren’t looking And I think Petteri has this ability to that, you know, many times he seems like he’s, he’s really, um, it’s not really clear what he’s up to, uh, but then suddenly, um, he scores.

[00:17:21] Jyri: And so this is because, um, you have to have a prepared mind, like if you, um, take up too much busy work. Thinking, you know, I could think a lot of, you know, founders and, you know, investors talk about hustle. You have to constantly hustle. Um, you tend to become somehow distracted and your buffers get full, so to speak.

[00:17:46] Jyri: Um, and you need the bandwidth to be able to act quickly and decisively. When you recognize an opportunity and so the best investors are like this. They are seers. They can see the thing And then instantly hit, you know, it’s like boxing like, you know, you see an opening and Before the opponent knows what happens, you know, they barely blinked and they’re down and so It’s this Kind of ability, um, which in early stage, particularly in the valley, separates the great from the merely good.

[00:18:24] Jyri: Because, you know, deals, when they come on the horizon, become very competitive very quickly. And here, you don’t really hear so much talk about like an Orange Eve or, uh, Um, a floodgate or a founder collective or SACA’s first fund, um, Chris SACA’s, you know, lowercase one, you know, it’s a hundred X fund. Um, these are the best performing funds.

[00:18:50] Jyri: They’re not Andreessen Horowitz or even Sequoia. Um, and it’s because these investors have been able to get into deals super early. Um, and they can then, um, Typically, uh, get the best multipliers. And their funds tend to be pretty small, and it’s difficult to get in them. And, uh, sometimes, like in the case of, I don’t know, Hunter Walk from Homebrew, they have actually stopped raising outside capital and they only invest the partner’s capital.

[00:19:21] Jyri: So, um, you know, sometimes you really, the only way to invest with them is to deploy your own capital alongside them and be friends with them. You know, um, Reid Hoffman, who just invested in , um, uh, steady energy, our Finnish nuclear reactor company here. Same way. I mean, Reid did it as a personal ticket out of his Mm-Hmm.

[00:19:45] Jyri: Foundation. He didn’t do it out of the, uh, Greylock Fund. So, um, you have to, that’s the other thing is, you know, you have to be able to collaborate with the best ’cause Investing is still a collaborative game. Mm-Hmm. , um. And you need these people because they will then lend their incredibly effective networks, um, into the service of the company and help it raise additional capital, acquire additional customers, hire the best talent.

[00:20:20] Josua: Is that, um, a lot, a lot of questions that I could ask there. Just, it was interesting. I think you mentioned that there’s among for VCs, there’s this tension between on one hand, wanting to grow asset under management, because that gives you bigger carry, more management fee on one hand, wanting to keep the fund small because that gives you a better multiplier.

[00:20:39] Josua: So, um, which way are you kind of leaning with ESV ceiling?

[00:20:43] Jyri: Our funds are small. Um, Again, yeah, it’s, it’s a question of whether you’re building an institution that has a lot of AUM, a lot of fee, you can hire a lot of people, you can see firms go this way. Um, you know, Andreessen I think just raised an additional, whatever, seven and a half billion.

[00:21:04] Jyri: Um, you know, these big funds, um, that’s fine. Um, that’s one way of surviving. Um, what you need to do then is Not only getting the winners, but then deploy a lot into the winners. Um, and then, you know, but it’s different from the practice of, Um, kind of company creation and being there at the very beginning.

[00:21:29] Jyri: Yeah, for sure. So yeah, it’s also just kind of, you know, to each their own, you know? Yeah. And yeah, like you

[00:21:34] Josua: mentioned, those are the things that you’re kind of interested in. Um, you’ve kind of stressed a few times the importance of network. And I think you’ve mentioned it in one of your podcasts that kind of like what yes, we see really the biggest value add to founders is this access to really high quality, uh, follow on add on investors.

[00:21:51] Josua: But, um, is that kind of like the bottleneck when we think about. Finnish Nordic companies, startups, is that they’re outside of like this, obviously, you know, maybe I would London, but this, especially the U S and Silicon Valley. And a lot of them don’t have access to, um, to those networks and to that amount of capital, which in the U S is like three times as big as, as Europe combined, is that like a problem?

[00:22:15] Josua: And is that something that you’re. Obviously, I mean, you were doing that with true ventures. You were helping, helping bridge the gap between Silicon Valley and, and, and, and Finnish startups.

[00:22:23] Jyri: Yeah, I mean, look, since True started investing in Finland, a lot of other funds have done that, too. Um, I think, you know, Benchmark has one or two investments here.

[00:22:34] Jyri: I’m not sure about Sequoia, certainly. Well, actually, Linear, but it’s a U. S. company, I guess. Um, it’s a Sequoia deal. Um, yeah, Excel, um, Obviously London funds like index very active here. So, um, yeah, you know, um, It’s, it’s great for them when they find a winner. So, um, but yeah, that’s, that’s historically been my role is I’m, I’m a, a bridge, right?

[00:23:04] Jyri: I’m a bridge between Valley Capital and the top Finnish founders, and it’s a good niche. You know, I can fulfill that. I hope that there are more of us in the, in the future. Um, is it a necessary role? Um, Not always, I mean, the top founders are fine, you know, they don’t necessarily need, need me, but it can certainly, um, make it, everything happen more quickly.

[00:23:33] Jyri: And then there are times when investors really matter. For example, ISAI, um, a satellite company here that’s required a lot of financing, probably would have died without True Ventures. Um, because True. Um, had large enough funds to. For example, not just lead the series seed, which I led while I was a true, but also lead the series B, which was already, uh, you know, a large round on, especially on finished terms that I don’t think any of the finished VCs at the time could have led.

[00:24:08] Jyri: Um, and without that, I probably couldn’t have raised that round. Um, and so there are times when it can become existential to have the right investor, like I cited in that case, and probably some Finnish companies that would have otherwise had success have failed because they maybe haven’t been able to access that.

[00:24:27] Jyri: Um, so yeah. You know, I think what we want here is a thriving ecosystem that also has, you know, larger. Local home homegrown funds right now all of the Finnish venture funds are roughly the same size. They’re all around 100 million They all invest that seed and if my partner Timo Ahopelto Calculated that the unicorn birthing rate the unicorn birth rate has roughly Thankfully gone up from 0.

[00:24:56] Jyri: 8, 10 years ago to something around 2. 3, I think he had said, um, right now per year, then you still have, you know, 30 finish managers who are all competing to for those two, two deals a year, which means that only the very top one or two will have, you know, outsized returns. Um, yeah, so I would rather. You know, join or invest in those managers and then focus on increasing that unicorn birth rate.

[00:25:32] Jyri: Um, And maybe also back the companies that show the strongest growth, the Auras or the iSize or the Swappies or, you know, whatever, whatever they are, um, at a later stage, rather than allow that hard work that has gone into kind of creating them and building them from scratch to then, um, sort of generate the opportunity for, you know, Um, outside investors to really reap the large rewards.

[00:26:03] Jyri: Like you were saying, the big assets under management, AUM guys who have funds in the billions, um, who can deploy a hundred million, 250 million, 500 million into a growth company like vault or supercell or aura. Um, and then once that three Xs or five Xs, you know, they will make over a billion on that. Um, typically, What’s happened is the finish, um, capital pools haven’t participated in those, those rounds anymore.

[00:26:35] Jyri: And it also has the other unfortunate effect that it tends to shift the balance of power in those companies abroad. And so we end up with management that sits in San Francisco, like with our, um, the, you know, companies getting sold to, you know, acquirers like DoorDash.

[00:26:54] Josua: Yeah.

[00:26:55] Jyri: I think, um,

[00:26:56] Josua: you mentioned somewhere that.

[00:26:59] Josua: Less than 1 percent when it comes to major Finnish pension funds, less than 1 percent of their total funds are committed to VC, which I guess is then lower than, uh, some other countries. So do you think that’s a big bottleneck right now is that we. Technically, I mean, we have the money, uh, in Finland, but we’re not just, we’re not deploying it on, on startups specifically.

[00:27:19] Jyri: Yeah, I mean, look, like, um, Finland’s a poor country on pretty much any terms, um, you want to measure with. The thing about it is that, The largest pools of capital here really are the pension funds. Yeah. We don’t have as much private capital, private wealth, family wealth as Sweden, for example. And so, um, in addition to the government, then we need to look at what the pension funds are doing.

[00:27:45] Jyri: And, um, thankfully they have written small tickets. you know, really token tickets into some of the VCs, even some directs, but what they really should be doing in my perspective is, you know, taking advantage of the great work that the founders and the VCs in Finland have been doing and benefiting, you know, ultimately the, Uh, the fins whose pensions will be hopefully, you know, dealt out from their funds also in the future by investing in the top performers and they really aren’t doing that right now and we hope to change that.

[00:28:23] Jyri: So, um, I think that’s one of the most obvious low hanging fruit opportunities for, for these pools of capital that. Hopefully they will, um, begin taking advantage of now that we’ve done the hard work over the last 10 years of creating a pretty steady flow of, of these high performing companies here.

[00:28:41] Josua: Yeah.

[00:28:42] Josua: That is interesting. You said that we, uh, I had a meeting with one person at, at one of these pension funds and he mentioned that they can come in to a fund. This was in the early 2000s. P context that that that’s not the issue. The issue is that they have limits on how much they can participate and it’s finding the rest because we don’t, like you said, we don’t have private wealth.

[00:28:58] Josua: We don’t really have a lot of family offices. And so that’s maybe a big, big constraint.

[00:29:04] Jyri: Um, yeah, I’m, I’m not really sure what that person was referring to. There are a number of these so called constraints that, uh, make absolutely no sense that are complete rubbish. Um, Yes. It’s obvious that if you’re investing into a fund, a venture fund, you know, typically as an LP, you don’t want to own more than 10 percent of that fund.

[00:29:31] Jyri: And there are such constraints, which are fine, but these are typical of any, you know, any manager probably doesn’t really want an LP that’s larger than that. Right. Um, okay. Um, the other thing is like, you know, what they, what they should be doing is, and these companies, like if you, if you invest through a fund or an SPV into a high growth company, like an aura or a vault, um, you can easily deploy a hundred million into it and you will still own only a fraction of it.

[00:29:59] Jyri: If you’re investing at a, let’s say a 3 billion valuation. Um, You’re not a particularly significant owner in that. You’re not going to, you know, ideally what you want to do is you want to have the manager, um, invest through a manager who’s already on the board. One of the finished VCs, for example, um, such that who you already know and who knows the company well and who can govern for you.

[00:30:26] Jyri: So, you know, it’s, it’s, uh, it’s, it’s an amazing deal for, for these. And, and, you know, um, it’s fine. I mean, these companies can raise that and. And they do raise that from outside investors. And that’s, you know, typically what we do. And frankly, that’s kind of been my specialty is, is also sourcing that capital, that fall on capital from, from us investors.

[00:30:47] Jyri: And I have no, no quibbles with that. They’re usually really good. Um, now that we’re at this point where we’re. Starting to have to figure out how the hell we keep the Finnish welfare state going. This is one of the ways that I think we can easily take a little bit of, uh, some of that upside and make sure that it also benefits our system here.

[00:31:08] Jyri: So, um, yeah.

[00:31:12] Josua: Suppose then we were able to, um, unlock this pool of, like you said, we don’t really have a lot of wealth, but we have some, some and that could be put to use deployed more effectively. Um, the kind of question that I have. And when I look at, for instance, Sweden, and we got like Northvolt, I don’t know if this is really a startup anymore, but anyway, they’ve raised like 13 billion debt and equity, um, H2 green steel over 6 billion debt and equity.

[00:31:34] Josua: And it seems to me that. Even if we had the exact same preconditions in Finland in terms of access to raw materials, infrastructure, government incentives, there’s not a single person or group of people in Finland who could, um, through storytelling, through having a large enough vision, through having, I don’t know if it’s access to, to, to the network.

[00:31:54] Josua: I don’t think that we have anyone who could put together that amount of money. Um, when we’re talking about billions and billions Do you think, do you agree? Is that a bottleneck for us?

[00:32:07] Jyri: I, I think, um, that’s potentially true until someone actually goes and does it. I mean, nobody did in Sweden before that either until, until it, it got done.

[00:32:21] Jyri: And so, yeah, I mean, in that sense, it’s no, not that dissimilar. I mean, we’re doing something like that with steady energy. Um, you know, there are things like P2X here, um, we just need to do more of it. And yeah, uh, it’s, you know, uh, the thing I think that is making it hard in Finland is that, um, we just kind of have to decide that we’re going to do this.

[00:32:47] Jyri: And then it involves the, um, you know, the pools of capital, meaning the pension funds, it involves the, the government, not just the TESI, um, entities, but also, um, you know, certain political. Decisions to be made. Um, there’s, everyone just kind of has to decide, okay, let’s just do this. And Finland is a wonderful place when that happens.

[00:33:13] Jyri: Cause then you tend to be able to get things done really quickly. Like we’re seeing in the case of, I don’t know, nuclear energy now, or are we seeing in the case of some, some defense related things, not as much as I would like to see, but you know, um, so. It’s it’s it’s not really that hard. It’s really just a question of people deciding that it’s a good idea

[00:33:37] Josua: So it’s a matter of collective decision kind of like what it feels like Israel Sweden Estonia Like those kind of like small countries have

[00:33:44] Jyri: yeah, if you talk to Almost anyone in power in Estonia or Israel.

[00:33:50] Jyri: They’re like, yep Or even Sweden. It’s like, yeah, like this is a good idea. We just need to, um, understand what the really strategic things are. Like, for example, let’s say batteries are, or Nuclear power is, or in Israel, I don’t know, for example, um, an RNA foundry and making sure we have a strong, um, RNA industry.

[00:34:16] Jyri: It’s going to, you know, those are heavy capital upfront capital costs or in the U S with the investment reduction act. Now, um, you know, these are political processes. They require a lot of debate. Um, but then ultimately you end up with a decision. And so, yeah, I mean, we just, Want that process to be functioning here in Finland as well.

[00:34:37] Jyri: And it’s not, you know, it requires people to actually have that debate and decide that it’s something that they believe in. Um, and we have, uh, something called the Finnish Startup Community here, for example, that’s sort of purpose designed to, um, introduce these, you know, this kind of practice. Which has been lacking from Finland.

[00:35:00] Jyri: I think it’s been doing a pretty good job. So I’m optimistic. I think that we’re going in a good direction.

[00:35:05] Josua: Okay. That’s really good to know. And I guess, um, every successful company, not just the Supercells and Waltz, but every successful startup kind of gives credibility to the fact that this is working and we have the ability to produce these Dekacorns or, um, world leading, um, world leading companies, startups in Finland as well.

[00:35:24] Jyri: Yeah, I think we have, um, some on the way now, certainly Aura, ISI, you know, there are companies that have started growing rapidly. Um, I don’t know about something like an IQM, but you know, I think that’s, that’s another potential good example. Um, what we want is we want more of them and we want them in the fields where right now we’re not active.

[00:35:49] Jyri: Um, we have something like, uh, Sensor Fusion in defense. anti drone systems. Uh, we want to see a company like that get 10 times, 50 times bigger than it is now. Um, you know, I think we want to design our own, um, cruise missiles here, for example. We want to design our own David sling, our own iron dome. What we’re seeing functioning really well in Israel right now, Helsinki certainly needs one.

[00:36:18] Jyri: You just look at the map and see how close we are to the Russian border. And you’re like, well, we probably need one of those here. Um, and they bring with them the talent that knows how to create them. And it’s not okay for us to rely on. Purchasing this stuff from the United States or even Israel. Um, they’re expensive.

[00:36:39] Jyri: And the other thing is that in any kind of conflict situation, they tend to get used up really fast. You know, just this weekend, um, for example, Iran, You know, sent hundreds of drones and missiles towards Israel. Okay, they, nearly all of them got intercepted, but you just do the math. And if it costs ten times more, uh, because you’re purchasing expensive equipment, F 35, you know, compatible.

[00:37:11] Jyri: gear from the United States, uh, defense industry, for instance, for each one, you know, if you, whatever, like burn a Patriot every time that you’re shooting down a 10, 000 rocket that’s been shot at you. Uh, from a cheap launcher, then at some point that math’s going to stop working. So I think these are just sort of obvious, you know, practical reasons why we should be investing in our own R& D and development of these kinds of interception systems.

[00:37:45] Jyri: lasers, radars. We have an excellent, you know, the world’s basically a monopoly on, on radar satellite imagery because of ISI now, which is heavily being used by the United States military and Ukraine. Um, so we have these assets already that we’ve been developing and we need to recognize them and celebrate them and, and build more.

[00:38:08] Jyri: So. But again, I see these things as an opportunity. That’s kind of how I, how I invest whenever I think about some feasible thing that could be a crisis that is either imminent or pending or just a possibility. I tend to flip it around and think, okay, well, if that happens, you know, if she invades Taiwan, um, how is that going to change the world?

[00:38:31] Jyri: What are we going to need? Um, um, Should I be investing in something, or should I start building something now that, in case that happens, um, will be helpful? Or what if there’s another pandemic, or, you know, or what if climate change accelerates more rapidly than we think, and we run into some issues with, for example, you know, losing fresh water in certain areas, or here in Finland, you know, what is it going to mean for our coastlines or our ability to grow our own food, our ability to manage the inevitable move north of, you know, A lot of people who get displaced.

[00:39:11] Jyri: Um, we can actually turn these into opportunities to build businesses, build startups, to build technology and solutions. And I think, you know, that’s the inspiring part about this job is that you can actually approach it instead of approaching it as a way to make money, as a way to make peace. And, you know, basically, Enable your kids to live in a better world.

[00:39:38] Jyri: And you know, what’s not to like about that. So if we need that here, if we, as a collective, as a society, decide that, you know, this is what, um, Finland should be known for in the world. Um, then I think, yeah, the world’s our oyster. We can become another, um, better Israel or another, um, you know, better, better, better, better, better.

[00:40:05] Jyri: Island state, you know, we can kind of create our own version of, um, what it’s like to have, you know, sort of like we’re a superpower and whatever rally drivers or, or hockey, um, we can be a superpower in startups that do good.

[00:40:21] Josua: I think that’s a, that’s a really compelling, compelling kind of pitch. And I guess that’s what you and other people are really working on.

[00:40:27] Josua: Um, and I, I, I know that, I mean, looking at your portfolio, you’re certainly putting your mouth where you’re. Money, money where your mouth is, um, compared to, I know some of the, sometimes you go on these VC websites and they have these lofty mission statements and they look at the portfolio and it’s like five different ad tech companies.

[00:40:46] Josua: Um, nothing wrong with that tech, but you know, certainly, um, it seems like you’re focused on, on startups that are pursuing technologies and solutions that are actually very. Potentially very, very beneficial to humanity.

[00:40:59] Jyri: Yeah, I think it’s a win win, because you know, if you look at what have become the biggest companies in the world, you know, an NVIDIA, potentially OpenAI, certainly a Tesla or SpaceX, you know, the startups that get really big, and I would include Google in that, Amazon in that, you know, they tend to address these kinds of problems.

[00:41:21] Jyri: And so, why not go for that, you know? That’s, you know, if you execute well, then, um, you’re going to beat all the ad tech guys.

[00:41:33] Josua: Yeah. And I mean, I guess also when you have an inspiring vision, you’re able to attract talent because at some point no one is super motivated by working on ad tech. Very few people are.

[00:41:43] Jyri: Yeah. Yeah, I think so. I mean, when you have a compelling vision, then, you know, it’s sort of like you look at the people that, you know, build rockets and, you know, You know, 50 degree Celsius heat in Boca Chica, Texas. The reason they do that is because they actually believe they’re changing the world and they’re probably right.

[00:42:00] Jyri: And so fundamentally what we want is, um, you know, several of these companies here that have, uh, they’re working on something that’s on that level and who understand how to also communicate that such that they can attract that talent.

[00:42:16] Josua: Yeah.

[00:42:16] Jyri: Um, yeah. And we have some, you know, Or it could be a hundred billion dollar, um, Google of Of, of health, you know, um, to help us live longer.

[00:42:28] Jyri: Um, we can, we’ve seen what happened with GLP ones in Denmark with Novo Nordisk, um, and Ozempic, you know, that is potentially one of the most game changing tech innovations of the century in the sense of if you think about the kind of, uh, lifespan improvement that is having on millions of people now, um, should we be putting more effort into RNA, uh, medicine, for instance, I think we should.

[00:42:57] Jyri: Um, so it’s about recognizing these opportunities. And then sometimes we, we, what we need is like a DARPA type instrument here, or maybe a Temasek. We have Tessie, but it’s, it’s a shadow of what it could be in the sense that it could, uh, you know, channel strategic funding in Finland towards this certain, you know, certain initiatives that, you know, I just looked up, uh, you know, DARPA’s funding, railroads on the moon, for example, with like serious money.

[00:43:27] Jyri: That’s one of the, um, you know, strategic, um, directions DARPA has chosen to begin, you know, investing in. Um, you know, and there’s reasons for that. It’s strategic for the United States. And so if we have that kind of visionary thinking here. And we have some of that at VTT, actually, the Government National Labs here, which are the origin of several of the Hard science innovations that have the most promise in Finland right now, including steady, steady energy, the, you know, small nuclear reactors for district heating company that I’m on the board of an investor in on that project very much started at VTT and is now being run by Tommy Newman, who used to lead the nuclear Power research division at VTT.

[00:44:18] Jyri: And so I think that’s a, a great example. Onnego bio is another one. There’s, you know, um, there, there are several of these that have come out of VTT, but, um, VTT is still fairly small. We need to fund it more. We need to, um, create, you know, other instruments that are like that.

[00:44:38] Josua: Yeah. Okay. Capital is definitely a big piece.

[00:44:40] Josua: Um, I will quickly kind of talk about here at the end, uh, the other piece, which is the talent piece. And you mentioned NVIDIA, Tesla, uh, SpaceX, these companies, but they have in common is first generation immigrate, uh, immigrants founded by first generation immigrants. I think if you remove companies, uh, those companies from like the U S NASDAQ or New York stock exchange, like huge portion of the equity value evaporates.

[00:45:03] Josua: So how do you think about that piece? Do we have enough? How do we attract more? Finland is a country that’s way up north, difficult language, no sunlight, like, how do you think about the talent piece? If there’s the capital piece, you’ve made a case that we could actually solve it by doing very concrete

[00:45:20] Jyri: things.

[00:45:21] Jyri: What do you think about talent? Same thing. I mean, we just have to decide that we stop blocking people from coming here. Um, particularly stop blocking the investors and the entrepreneurs. Um, you know. Any reasonable European country, for example, has an investor visa. Even a place like France, um, Finland does not.

[00:45:42] Jyri: It’s still impossible, frankly, to come here unless you already have an employer here, um, so you come work at a job, but entrepreneurs and investors generally, they don’t come to work for someone else. Um, you know, so We have a blind spot for the most valuable people who we need the most, because they’re the ones that create the companies that then create the jobs.

[00:46:09] Jyri: Um, and that’s a shame. And so we need to fix that. It’s just, you know, these are just not, there’s nothing very hard about this. It’s super easy. It’s just about whether or not you want to do it or not. I think that, you know, the funny thing in Finland is that the consensus is, yes, um, We should do these things, you know, everyone from the true fins to the, you know, uh, leftist parties seem to all agree about these things, roughly that we need to attract more people in principle, then you just kind of have to say, okay, well, if we really mean this, then let’s do it.

[00:46:47] Jyri: But that’s, I think we’re unfortunately right now where we’re stuck is that there isn’t a lot of action. Um, yeah. So, um, it’s not complicated and ultimately we either do it or, or we, we die. I mean, there isn’t really an option. It’s, it must be done. It’s like Elon Musk says, you know, it must be done. So,

[00:47:09] Josua: yeah, we, I mean, we, Finland, we have no population growth.

[00:47:12] Josua: They have no productivity growth, so it’s got to come from somewhere.

[00:47:16] Jyri: Yeah. Yeah. I think that, you know, there’s a unfortunate, um, confusion that, you know, immigration somehow means something negative. In fact, you know, it’s the best thing that could happen. Um, and the other confusion is that it necessarily means, um, you know, somehow, like, People who we don’t want.

[00:47:47] Jyri: And again, you’re like, well, what if you actually went out and did what Portugal or Estonia or France, or pretty much frankly, now any reasonable country is doing, uh, which is attracting and inviting the people you think you need the most. Um, which is by the way, what we’re not doing at all. Um, you know, each of these countries, you know, France has La French Tech.

[00:48:16] Jyri: It’s even called French Tech, not something in French. It’s like in English. Um, and it’s an organization with, you know, a permanent team in Silicon Valley, for instance, only focused on, you know, Attracting the top Silicon Valley, uh, talent to France, you know, arranging a fast visas and hosting dinners and just generally inviting people to spend at least a part of the year living in France because they know how big of an impact that can have on the French economy.

[00:48:52] Jyri: And so, you know, that’s the other thing I think we need to understand is that people who think like this. Tend to have multiple homes. Um, they’re not gonna necessarily move to Finland full time because they spend a part of the year in Aspen. And, you know, they also have a house in Hawaii. And, you know what?

[00:49:14] Jyri: That’s great. Um, maybe they only spend the summers here. I don’t care. As long as they spend some time here, and they end up funding our, our companies, and sitting on their boards, and bringing their networks and their expertise to help our businesses grow faster, and employ more people, and ultimately, you know, generate more tax euros for, you know, the Finnish pensioners.

[00:49:37] Jyri: So, that’s what we want. And so, that’s what we want. It’s again, uh, just a slight expansion of the definition of immigrant, uh, and it can make, you know, it can work wonders. We don’t need a lot of them, you know, couple hundred and I bet you will have, you know, triple the amount of unicorns that come out of here.

[00:49:57] Josua: I think you made a great case that there’s been this like blind spot, probably based on just history. Um, having Finland being, and we’ve only, we’ve only had these like big industrial companies and we haven’t really thought about startups and investors. Um, certainly not from a legal point of view, but you’re of the opinion that Finland can actually compete with.

[00:50:17] Josua: Singapore, Dubai, um, France with, you know, all of its benefits and, and we can compete on a global, global level for talent.

[00:50:25] Jyri: Yeah, I think that, you know, as climate change progresses, I was just watching videos on my way here, uh, from Dubai right now, which got deluged by a huge flood. Um, these are all climate change related.

[00:50:42] Jyri: Severe weather issues that are turning these places on inhabitable. What’s going to happen to Singapore tiny island? you know as the Hurricanes in that part of the world and you know Other bad shit that’s happening with climate change Starts battering them for real Finland starts looking like a more attractive place The further, you know, this crisis progresses.

[00:51:11] Jyri: And so in that sense, I think we’re fortunate to have at least this one enormous advantage that as time moves on, Finland is simply just going to Begin looking better and better.

[00:51:24] Josua: Hmm.

[00:51:25] Jyri: What do you think

[00:51:26] Josua: about, um, I think there was, um, I don’t know if it was like, um, matter of being discussed, but someone proposed the idea of adding English as a national language in Finland to make it easier.

[00:51:37] Josua: What do you think about things like that? Concrete?

[00:51:39] Jyri: Yeah, I think that’s a great idea. All it really means is that you can expect to get official service in English.

[00:51:47] Josua: Yeah.

[00:51:48] Jyri: And you know. It’s, again, we have multiple official languages already. Um, you know, is it going to mean us losing finish, that finish is going to die?

[00:52:04] Jyri: Well, I can tell you if we don’t do these things, it will die for sure. We already know that, right? So, these are the only things we have at our disposal right now that give us at least some chance of survival. And so yeah, um, I’m, I’m for it. I think it’s

[00:52:21] Josua: a great idea. Um, Yuri, it’s been, it’s been really great.

[00:52:25] Josua: I could ask you tons and tons of more questions, but, um, we have to be mindful of your time. So one final question, I think you may have alluded to this in the conversation, but is there any specific area of like techno technology or technological progress that you’re kind of paying a special particular attention to and feel very excited or optimistic about.

[00:52:45] Jyri: Yeah, I feel really excited about, like I mentioned already, um, RNA. Um, we have a company called Helix Nano, right? That’s actually run by a Finn Hanurajanian in Silicon Valley that has made some breakthroughs in RNA vaccines and adjuvants that make it possible for us to do really, um, mind blowingly cool things, um, basically to enhance people’s health and, Cure disease, um, that I’m super excited by.

[00:53:20] Jyri: Um, obviously I track AI very closely. I have my own thesis on that, which I’m not going to go into for lack of time. But I do think that if you’re young and interested right now in what is going on with the world, go west. Spend some time in the valley. Go work with Hannu Raya near me at Helix Nano. Or go work with open AI and come back and start a company here.

[00:53:49] Jyri: I mean, that’s what I’ve done and it’s worked out okay for me. So why not?

[00:53:54] Josua: That’s really good advice. Um, for people who want to follow you, where are you most active? Twitter, LinkedIn, or X, I should say, or LinkedIn?

[00:54:02] Jyri: I’m at my first name, J Y R I, Yuri at X. And you can find me on LinkedIn easily too.

[00:54:08] Josua: Okay. All right.

[00:54:09] Josua: Um, thank you so much. And, um, it will be really exciting to follow all the investments that you’re making and, and, um, kind of pushing for the changes that you’ve outlined, the legal, cultural, political, um, here in Finland to be able to increase, like you said, the unicorn birth rate.

[00:54:24] Jyri: Yes. And join the Finnish startup community if you are a startup founder and haven’t already.

[00:54:31] Jyri: We look forward to having everyone there and yeah, becoming a force for change in this country. Thank you.

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