Risto Siilasmaa – lessons from dot-com bubble, transforming Nokia, and investing in unicorns

3 takeaways from the conversation with Risto Siilasmaa

Focus and Integrity Drive Long-Term Success

One of Risto’s biggest lessons came during the dot-com bubble. While many rode the wave of inflated valuations, he chose to publicly state that F-Secure’s stock was overvalued—a move almost unheard of at the time. Though the stock tripled afterward, his commitment to honesty built trust that outlasted the bubble’s collapse.

Similarly, he emphasized the painful but critical need for focus at F-Secure. The company started by doing anything that paid the bills, but gradually transitioned to a single focus: cybersecurity. Letting go of profitable distractions wasn’t easy, but it set the foundation for sustainable growth.

Reinventing Nokia: Courage to Lead Through Crisis

When Risto became chairman of Nokia, the company was on the brink of collapse, losing ground to competitors like Apple and Android. He played a pivotal role in selling Nokia’s struggling handset division to Microsoft and focusing on telecommunications infrastructure—a bold and controversial decision that ultimately saved the company.

Risto’s ability to maintain faith, make tough decisions, and rally his team during the darkest times was key. He believes leadership is about creating a clear vision and instilling confidence in the future, even when the road ahead is uncertain.

Spotting Unicorns: The Power of Great Founders

Now a prolific startup investor, Risto has backed multiple unicorns. His approach? Bet on exceptional founders. For him, the most successful entrepreneurs share qualities like optimism, resilience, and the ability to learn quickly from failure.

He cited Miki Kuusi, co-founder of Wolt, as an example. Even though Wolt’s initial business idea wasn’t great, Miki’s determination and analytical mindset convinced Risto to invest. That instinct paid off as Wolt made a billion-euro exit to DoorDash.

Watch the episode:

Podcast transcript

[00:00:28] Josua: Risto thank you so much for [00:00:30] coming on the show. It’s

[00:00:30] Risto: my pleasure.

[00:00:32] Josua: We we have a full docket.

[00:00:34] Josua: There are a lot of things that I want to cover cover with you and so many interesting things from, entrepreneurship, building your own company, to then leading a massive company, Nokia startup investing, and then [00:00:45] overall technology and trends. But I think To keep it simple, we can start in chronological order.

[00:00:51] Josua: So the first thing that you’re obviously really well known for is F Secure. A company that you started in 1988, I think. Was then named Data Fellows, but [00:01:00] became F Secure. So I’d be really interested to hear, because it’s, 1988 was such a different time in Finland’s, call it startup ecosystem than what it is today.

[00:01:10] Josua: There was no VC probably to speak of, no successful international [00:01:15] software companies. So what was it like as a 22 year old getting that business started when it comes to recruiting, when it comes to selling? Did people, how do people respond?

[00:01:27] Risto: Back then there were no [00:01:30] sort of people to follow.

[00:01:33] Risto: in tech entrepreneurship in Finland. And the whole atmosphere was quite different. I was raised to believe that entrepreneurs are people who fail in a proper job. [00:01:45] And that’s why they have to become entrepreneurs because they are unemployable. And yet I became an entrepreneur myself and I can’t fully explain how come Believing what I did believe about entrepreneurship, I [00:02:00] did become an entrepreneur, but somehow I felt that tech is different.

[00:02:04] Risto: We already had Microsoft that everybody knew and it had a founder and felt that I can do miracles. And it was my [00:02:15] dream to create something that people on the other side of the world would be using. And the world was a much larger place back then. Typical Finnish families, maybe they traveled once a year in the summer to a Greek [00:02:30] island.

[00:02:31] Risto: But that was the sort of well off people who did that. And there was no internet. The idea that somebody would be using my software in Japan pretty much meant [00:02:45] that we would have mailed diskettes or shipped diskettes to Japan, cardboard box, which was how the software was sold. And that was fascinating to me.

[00:02:58] Risto: And we create something [00:03:00] completely new and people pay to use it on the other side of the world. F Secure was founded at a time when I didn’t have any money myself. We didn’t have any investors. The first [00:03:15] external funding we got was when we did our IPO 11 years later.

[00:03:19] Josua: Wow. Okay.

[00:03:20] Risto: So it was not that straightforward to start doing R& D because we first had to have a sufficient income [00:03:30] so that we could pay people to do R& D.

[00:03:33] Risto: So we did pretty much everything that somebody would pay us for. And then increasingly spent on [00:03:45] creating cybersecurity software applications. And suddenly started getting a revenue stream from that. And then we slowly and painfully faded everything else away and focused on that. [00:04:00]

[00:04:00] Josua: You said painfully, was it emotionally painful or just like in terms of business, letting go of like profitable customer relationships to focus on this one thing?

[00:04:10] Risto: It was painful. Partially painful because of feeling committed to those customers [00:04:15] and letting them down. Some of the stuff we did was quite interesting and not being able to be involved in those interesting things was a bit painful. But change is always, [00:04:30] if not painful, at least strenuous.

[00:04:33] Risto: Yeah. So you have to work hard to make that change happen. Die off the loose ends. And we did 30 different things. So there was lots of loose ends to fix. And [00:04:45] that’s why it was, it took a lot of time. It was, took more time to finish those things than to continue doing them.

[00:04:53] Josua: Ah, I see.

[00:04:53] Josua: Okay. Okay. You want to finish them well. I think, I believe you mentioned at some point that that F Secure developed the first or [00:05:00] among the first VPN products in the world. And obviously that’s a big business. It’s a big technological innovation, but I think you mentioned that as actually like a mistake because it took away from the core focus.

[00:05:13] Risto: Yeah. We were not [00:05:15] properly focused. One of my big mistakes or failures in hindsight, we did all sorts of encryption software on top of the antivirus. [00:05:30] Software. So we had file encryption. We had some disk encryption. We had VPN. We had an SSH solution. And a small company cannot [00:05:45] properly make progress on so many fronts, especially if the way to sell these solutions is different.

[00:05:52] Josua: Yeah.

[00:05:53] Risto: If you have a VPN. Clear customer segment, clear go to market model, and the [00:06:00] same buyer in the customer companies for a number of products, that’s ideal. But if the buyer is different, if the channel is different, if the customer segment is different, then you just get fragmented. [00:06:15] And that’s what happened to us.

[00:06:17] Risto: So we did have what Cisco called the first VPN in the world.

[00:06:21] Risto: And Cisco was interested in acquiring that, that VPN. And still remember how exciting that was for a [00:06:30] very young company. To suddenly get Cisco, which was one of the world’s largest tech companies, already back then, calling us. And, hey, we want to come and we are interested in acquiring a piece of [00:06:45] software that you have developed.

[00:06:47] Josua: That, that goes really well with your idea, like first vision of being able to create something that’s being used around the world, like now you have this American big, huge global tech company wanting to, to use your software, but that leads me [00:07:00] to wonder what was it that allowed you to develop, for instance, this, but also other innovations, tech innovations, Finland was the internet was very new.

[00:07:08] Josua: Finland was still very isolated in a lot of different ways. You are, like, like you said, you do not have any [00:07:15] external funding until IPO. How were you able to invest in R and D and be so successful at developing these products with what must’ve been like very limited resources?

[00:07:26] Risto: We didn’t do everything ourselves.

[00:07:28] Risto: We found good partners, [00:07:30] brilliant people who were very good in certain narrow areas, narrow fields. And we partnered up with them. And built a go to market channel for cyber security [00:07:45] software. And we’re pushing that forward, we just went too broad.

[00:07:49] Josua: Yeah.

[00:07:50] Risto: But it was quite a profitable business. So we were able to invest in R& D quite heavily.

[00:07:57] Risto: For the first 50 or so quarters, [00:08:00] I think we grew in every single quarter compared to the previous quarter. And I think all those 50 plus quarters were profitable. So our average rate of growth annually for the first 11 years was about 80%. [00:08:15]

[00:08:16] Josua: That’s pretty, that was, that’s incredible results.

[00:08:19] Josua: And then you go public in 1999 and you did something. That was, I think very interesting. I’m not sure exactly what This must have been just after that. But at some point you put out a press [00:08:30] release, the company did, saying that you found the stock price to be, I think, challenging.

[00:08:34] Josua: Essentially saying, the stock is too high. We’re not worth this much. And then, after that, the stock price tripled or quadrupled, which says something about how crazy the [00:08:45] bubble was at that time. But what made you do that? Because, I’m guessing maybe you’re the only Finnish publicly listed company that has done that.

[00:08:54] Josua: What made you want to go out and say that, we don’t think this reflects the actual value of the [00:09:00] company?

[00:09:01] Risto: We tried to build a sort of a business philosophy that we tried to communicate in simple sentences and with examples. So one of the things that we tended to repeat to [00:09:15] do all of our Fellows, that’s what we called the team members, they were fellows.

[00:09:21] Risto: So we had a fellowship in the company. And one of these sort of wisdoms that I continued [00:09:30] parroting was that we want to do everything the way that if we read about what we have done in the tomorrow’s, morning’s newspaper front page, we’ll be proud of it. And I’m today very [00:09:45] happy that we did issue that press release or stock exchange bulletin, because I think it was the right thing to do.

[00:09:53] Risto: And there was a bubble forming, and I understood it, or actually I understood it [00:10:00] very clearly, but I didn’t fully behave according to that understanding, which is one of the things. the things that I hope I have learned from. So I understood it, and [00:10:15] then I took the right steps so that I could feel good about it afterwards, including the fact that we told publicly that we feel we are too highly valued.

[00:10:25] Risto: And the stock did triple after that sort of press release. [00:10:30] But then I continued increasing our cost base at the same time. And of course, there was lots of pressure to do that. Our investors were. criticizing us for not burning enough money. We were too [00:10:45] profitable or we were not loss making enough, which is weird.

[00:10:51] Risto: But I, and I went along with that to an extent and I shouldn’t have. But the problem is that let’s say [00:11:00] a lot of people said a few years ago that zero interest rates are here to stay. Yeah. And a lot of people believe that. Many people didn’t really believe that. They felt that it will stop.

[00:11:14] Risto: [00:11:15] Because it has always stopped before. I have gone through four big financial crisis in my life, and every time before the crisis there were people who were saying that this is the new normal. And [00:11:30] when you hear that, you know that no it’s not. Things will go back. The regular laws of nature will be valid again, but you don’t know when.

[00:11:44] Risto: So if you, for [00:11:45] example, stop investing completely, waiting for the bubble to burst, or the crisis to begin, and you are like two years too early, that can be fatal. And [00:12:00] that’s a typical mistake people do. they go with the crowd even when they realize that this will not continue. Where the right thing to do would probably be asking [00:12:15] yourself what warning signals or what predictive facts, metrics, could tell me that now we are getting closer to the brink where things will go back to [00:12:30] normal.

[00:12:31] Risto: So that I will take a scientific approach to adapting the way we behave in the company so that we will not be caught with our pants down when things go back to [00:12:45] normal, i. e. collapse. And I was not fully rational back then in my own leadership, even if I realized that this is a big bubble.

[00:12:57] Josua: It’s so fascinating. I’ve heard you talk [00:13:00] about that, that, not acting, not taking the logical actions based on what we actually know to be true and not thinking out and acting out the second, third order consequence or third order effects of what we know must be true. Like you said, if something is not [00:13:15] going to continue forever, it has to stop.

[00:13:16] Josua: But still, you said by looking back, you don’t think you acted fully rationally, but it still took a lot of integrity. To do that, because I could imagine a lot of your peers would have deluded themselves [00:13:30] in thinking that we are worth this much and we are the new, this is the new economy and everything is different because it serves their financial and other interests.

[00:13:38] Josua: So

[00:13:39] Risto: this, they were entrepreneurs that had listed their company and sold all their [00:13:45] shares at the height of the bubble. And I have often wondered that if we, if you would now go back to those same individuals and ask them hand on heart, do you feel happy that you did that? [00:14:00] How many of them would say yes?

[00:14:03] Risto: I think many of them have regretted it because first of all, you can become too rich too quickly and it will change you as a person. Also, you are [00:14:15] used to working Very long days being a hundred giving your hundred percent to the company and suddenly you sell it and you have nothing except a big pile of money.

[00:14:28] Risto: And I think many of [00:14:30] these people feel they made a mistake. So I’m very happy that not just did we say something.

[00:14:37] Josua: Yeah.

[00:14:38] Risto: But we also didn’t sell. Oh. I have always said that I didn’t lose [00:14:45] anything in the, when the bubble burst, I had the same number of shares after the bubble compared to pre bubble. So things stayed the same.

[00:14:55] Risto: Of course, the price of those shares first went up and then came down, [00:15:00] but it really didn’t impact me.

[00:15:03] Josua: I think that’s so extraordinary because what you’re saying is obviously, it’s, it rings really true, but When you look at the startup discussions, whether it’s in the U. S. or maybe also here in Europe this, the importance of acting with integrity and how it’s going to [00:15:15] impact you later on personally, but also your company’s reputation I don’t feel like that’s really the focus.

[00:15:20] Josua: It’s more focused on growth and all the, what that brings with it, quick exits and so on. But it, like I said, it obviously rings true that you acted with integrity and, That [00:15:30] has paid dividends for you, if not even in terms of business and financials, but emotionally,

[00:15:38] Risto: Discussion before we started recording, I said that let’s not talk about U.

[00:15:42] Risto: S. Politics, but [00:15:45] let’s talk about U. S. Politics a little bit because one thing that is of great concern to me is what’s happening in the U. S. Tech scene, where some of the most visible entrepreneurs Seem to [00:16:00] be drunk on their wealth. And they measure their value through how much they, how much their shares are worth.

[00:16:12] Risto: And that leads to [00:16:15] a way of running the companies and leading their own lives that is only focused on, on money and money becomes the metric of their self worth. And that [00:16:30] makes them set sort of human values and good leadership practices and basically their people on the side. And that is dangerous because they are the role models.[00:16:45]

[00:16:45] Risto: They are the most visible tech leaders, tech founders in the world. And if the young kids who are looking up to them and dreaming of becoming founders themselves, then copy those [00:17:00] behaviors. It’s not a good direction. And now the many of the tech leaders and large companies in the U. S. went behind the soon to be president, [00:17:15] clearly because they felt that it in the short term, it’s more profitable for them.

[00:17:22] Risto: And that’s also, I think, dangerous. That we don’t take the long term view. And in the U. S. [00:17:30] especially, many of the most admired companies have been very aggressive in their tax planning. So they don’t feel that it’s their duty to pay taxes, help the society run. And they would rather pay zero [00:17:45] taxes.

[00:17:45] Risto: Whereas in Finland Many companies actually are being managed in such a way that they will pay a reasonable tax rate. And there are no efforts to reduce that below a certain [00:18:00] level. And many individuals as well. I’m a happy taxpayer if one can be that. But I do feel that it’s not the way from me if I support Finland.[00:18:15]

[00:18:15] Risto: to do the things that make this country one of the best countries in the world. Even if I, at the same time, I’m very frustrated at some of the mistakes that we are doing and some of the low hanging fruits that we are not picking. [00:18:30] But still there’s so much good in Finland that I, and the biggest one for me, is the equal opportunities for all or as close to that ideal as we can get with free education and free health [00:18:45] care.

[00:18:47] Risto: And that’s worth paying.

[00:18:50] Josua: Yeah, on the topic of taxpaying goes back to what you said about, do you want your name listed in, the Panama Papers in the, on the front page, or do you want to act both in [00:19:00] terms of your personal life, but also in company wise in a way that you don’t have anything to hide?

[00:19:04] Josua: I think that gives a lot of freedom to people. But

[00:19:08] Risto: that is a double edged sword as well, like this discussion about Sanna Marin. What she’s doing is [00:19:15] completely legal. We have set things, we have built certain incentives. And if people follow those incentives, then they are doing what the lawmaker sort of wanted them to do.[00:19:30]

[00:19:30] Risto: Because if we have an incentive to give birth to kids, and somebody does that, then it’s what the lawmaker wanted to happen. If we give a tax incentive, or create a structure where taxes are lower, [00:19:45] then people follow that. It is what we wanted. Yes. Even if we actually didn’t want it, and then we should change the law.

[00:19:54] Risto: And then people will behave differently. It’s too faced to [00:20:00] criticize somebody who is doing what is based on the structure that we designed ourselves or in the parliament. Of course, people who criticize that structure in the first [00:20:15] place and then they take advantage of it, that can be a bit challenging, but still they are doing what we intended, the way that we intended the machine to work.

[00:20:26] Josua: Yeah. Yeah, it can become so, so politicized and [00:20:30] presented in the wrong way. I remember when there was a discussion in Finland about what was in the media portrayed as a tax loophole. In actuality, if you go to the, tax authorities website, they’ve explained exactly what it is and exactly how to use it because like you said, it’s [00:20:45] designed to be used.

[00:20:45] Josua: So it’s not really a loophole. Yeah. Utilize. Anyway you mentioned about the, entrepreneurs getting rich and then using that money to that, that wealth impacts their sense of self and how they treat others. And you’ve obviously had a very personal [00:21:00] experience about with, of this topic.

[00:21:01] Josua: During the dotcom bubble, your stock skyrocketed and I think you were the richest person in Finland at the time and you got a lot of media publicity. So if you don’t mind, like how. How did that impact you? Because you were fairly young and it’s, I’m guessing this [00:21:15] happened quite quickly.

[00:21:16] Josua: How did it impact how you thought of yourself? Did it change how people around you treated you? What was that like?

[00:21:24] Risto: I was lucky that I didn’t actually have that money. It was theoretical [00:21:30] because I was not selling my shares. It definitely would have impacted me more if it would have been cash money visible in the bank.

[00:21:40] Risto: bank account, but it did change me. I [00:21:45] started thinking more of myself based on financial presumed success. And it took me a couple of years to wake up and realize that [00:22:00] I am thinking more of myself based on something that has no impact, at least no positive impact on my identity. So I had started to believe what my [00:22:15] public persona was.

[00:22:17] Risto: And I started becoming what people assumed I should be. And that was a bit scary.

[00:22:27] Josua: How did you break free from that? Because I think [00:22:30] the last part you said about trying to live up to the expectations that lots of people around you have, or at least that you think they have. I think that’s, that can be really hard to break out of because it’s so natural human tendency to want to do that.

[00:22:42] Risto: Yeah, maybe I’m lucky that the bubble burst [00:22:45] and there was lots of pain and tears. My, the company I founded had always been profitable. Suddenly we were not profitable. We had never laid off people. Now we were laying off people. [00:23:00] I was very much in pain and feeling that this is all my fault and I’m a failure.

[00:23:07] Risto: So there was not that much time feeling that I’m now the best ever. And maybe that was a [00:23:15] blessing. And then of course we got the company growing again and became soon profitable again and things were fine. But that part between the sort of bubble and [00:23:30] bubble bursting and then getting things on track again.

[00:23:34] Risto: That is probably a very healthy period, even though it was quite painful.

[00:23:39] Josua: I can imagine how, I’m always fascinated by people [00:23:45] who manage tough times and especially make tough decisions and not run away from, shirk away from responsibility or these tough trade offs, but rather run towards it.

[00:23:56] Josua: So you mentioned, for instance, laying off being a very difficult [00:24:00] thing. These were people that you’ve hired, presumably people that you knew and you felt responsibility for. So how did you on a personal level have the resilience to, to go through these, uh, tough times as a company?

[00:24:11] Risto: It’s basically based on [00:24:15] understanding sort of the alternative outcomes, doing scenario based thinking. And the fact is that people are happier in a successful company in general. And [00:24:30] if you have, your costs are too high, you are all the time fighting to, to pay the payroll. It’s not a happy company.

[00:24:40] Risto: People are not stupid. They understand that this company is in trouble. [00:24:45] And sometimes it’s just the healthy way to fix it quickly and then be a healthy company again and then start building from that. Of course, it is in many ways [00:25:00] a failure of the leadership to have raised the cost base so high that this happens.

[00:25:06] Risto: Thank you very much. But that failure or that mistake has been done. You can’t change it anymore. Focus on what you can do now. And then try to [00:25:15] explain it to people. And just be as honest as you can. How do you think about that? What are the alternatives? We do nothing. We do just a little bit. We get most of the pain but very little of [00:25:30] the benefit.

[00:25:31] Risto: Or we do more and then start building again. Typically Every company is built for a business that they used to do a couple years back or for very large companies, what they used [00:25:45] to do five years back or 10 years back. But if you have to make this big change, it’s an opportunity to build a different company.

[00:25:55] Risto: As you start growing and hiring again, you don’t [00:26:00] hire the same people, the same talent. I’m trying to become different and it’s an opportunity.

[00:26:07] Josua: Yeah. How important is it to have the founder entrepreneur either in the CEO seat or very least [00:26:15] somewhere in, in a decision of influence leading the company through these very difficult, big changes when you talked about that, that made me think of Intel and Andy Grove and they navigated a lots of really big changes.

[00:26:28] Josua: And [00:26:30] and it feels like, or what was your thought? Is it crucial that you have the founder CEO?

[00:26:35] Risto: It helps to have a leader that people want to follow and believe in. [00:26:45] Leader without followers is just a guy taking a walk. No, it’s true. And like in, in Nokia during the tough days, It was so important [00:27:00] to, to try to maintain faith for the future.

[00:27:03] Risto: Yeah. Because if people give up, then the game is lost. And the Nokia people they were just amazing. After a series [00:27:15] of huge layoffs, and everybody beating us up for the right reasons, Nobody liked us. Nobody wanted to work for us. Nobody wanted to buy our share. [00:27:30] We had people who knew that they would be laid off at the end of the year.

[00:27:35] Risto: And they worked overtime day after day for the whole fall to get a new product ready for launch on schedule. [00:27:45] And that was just amazing sort of spirit. Working, keeping everything for the company, even if you were getting nothing.

[00:27:57] Josua: We’re going to get to Nokia. That’s such an [00:28:00] interesting chapter.

[00:28:00] Josua: I want to double tap on what you just said. If kind of wrap up F Secure huge transition there with the IPO and the challenges now it’s, um, but then you stayed on for a total of 18 years for leading the company as CEO, then transition to board. F [00:28:15] Secure is now split into two companies with security B2B side, F Secure the B2C side, both publicly listed.

[00:28:22] Josua: Both companies have now then been around for, Almost, I can’t do quick math, but

[00:28:26] Risto: 36 years.

[00:28:27] Josua: Yeah, which is extraordinary. So when [00:28:30] you look back at that, and obviously you’re still involved chairman of with secure and on the board of F Secure, is there anything that stands out in terms of what you’re especially proud of when you look at those companies and what you and the team has achieved over

[00:28:42] Risto: Maybe I’m most

[00:28:44] Josua: proud

[00:28:44] Risto: of [00:28:45] the fellowship, the culture that we wanted to create and in many ways did create.

[00:28:55] Risto: It’s the people that really matter. Not the [00:29:00] products as such. Also proud of the technology we created, of course, in many ways we had and still have superior technology to many of the companies that are 10, 50 [00:29:15] times bigger than we are. And many people presume that the big companies have better products.

[00:29:21] Risto: It’s just not true. On every conceivable sort of rational metric, oftentimes we are much better [00:29:30] than the products that are assumed to be the best. And, but that happens through the people. The brilliant people who do things smart, the smart way. And this applies [00:29:45] to all the companies that I’m involved with.

[00:29:47] Risto: It is this combination of people and great solutions that fix problems that customers have in a [00:30:00] novel way and a better way. I really enjoy that sort of interaction.

[00:30:08] Josua: It must be very, especially interesting or a kind of rewarding maybe for you, because you’ve seen the entire journey. You know exactly where it [00:30:15] started and how, I’m guessing you look back, you’re like, wow, we were so, unadvanced.

[00:30:19] Josua: There’s so much we didn’t know. And you’ve seen this progression. You don’t

[00:30:22] Risto: tend to look back that much. And there are so many beginnings. But [00:30:30] Each product begins at some point in time. Each new organization begins at some time. When you fire somebody to lead a business, that’s a new beginning. I don’t really [00:30:45] think back so much, except for, let’s say, a particular business, maybe.

[00:30:54] Risto: The current way we are trying to run it may be three years old. And I think about that three year [00:31:00] period. But I don’t think about the previous three years that much. And I think what did we do right in during these three years? And what did we do wrong? Rarely do I connect with the [00:31:15] company back in 91, which was completely different.

[00:31:19] Risto: It’s, you can’t compare.

[00:31:21] Josua: It’s been reinvented so many times. Exactly. And the people have changed, with the exception of at least you. We have a few,

[00:31:29] Risto: which is one of [00:31:30] the things that I feel very proud of.

[00:31:32] Josua: Yeah, they’ve really grown with the company they’re developing.

[00:31:35] Risto: Like Mikko Hypponen, who is quite a famous person worldwide, and he has grown with the company, and the [00:31:45] company has grown with him, and I’m so happy that he’s still with us.

[00:31:50] Risto: is just a wonderful person and a wonderful asset for the company.

[00:31:54] Josua: Yeah. And someone said, it said that there’s, you have this compounding effect also in relationships [00:32:00] when you get to know people and you develop trust, they become more, both effective, productive, but also more enjoyable, more rewarding.

[00:32:10] Risto: But having said that, there is a lot of value in renewal. [00:32:15] If you have exactly the same team. for too long, then you lose many new ideas, many new influences. Diversity gets lost, it fades away. People become more like each other [00:32:30] in a tightly knit team. So you need both.

[00:32:33] Josua: Speaking of renewal, if you go to the second kind of chapter in, in, in your career or professional life, the big one Nokia, which you joined as a chair, I think it was in 2012.

[00:32:43] Josua: Can you talk [00:32:45] like, what was it like when they first approached you about joining the board? Was it you were like, yes, I’m so excited to do this or, cause yeah. What were your first kind of reactions?

[00:32:54] Risto: It definitely was. Very exciting. I [00:33:00] fought to keep my voice steady, not to show how excited I was and how thrilled I was to be asked.

[00:33:07] Risto: It was a dream come true. Nokia was just a extraordinary [00:33:15] company. And especially back then it was the, one of the best companies in the whole world. And really lift it on a high pedestal. And then reality became very different very soon. [00:33:30] Yeah. I would have loved to, to join the board a few years earlier.

[00:33:35] Risto: Because now I didn’t get to enjoy that success for many months. The trouble began almost immediately.

[00:33:44] Josua: Yeah.

[00:33:44] Risto: [00:33:45] And then it was just downhill from there on until. the big transformation.

[00:33:52] Josua: And it was like extraordinary. I was still, personally, so young, so I wasn’t really super paying [00:34:00] attention to it, but the challenges were extraordinary.

[00:34:02] Josua: The fall from the peak was, almost unprecedented, maybe at least in like on European in European standards. So what was what was it like, what were the first things that you had [00:34:15] to. Trouble started very quickly. What was it required of you then as a chairman to, to start what were the first problems that you had to solve?

[00:34:23] Risto: When I became chairman, the company was already fairly far down on that track.

[00:34:29] Josua: Yeah. [00:34:30]

[00:34:30] Risto: And we understood the situation quite well. The previous years were more challenging because we were in a fog of war. And we didn’t really see very far, and we were [00:34:45] constantly disappointed by what happened.

[00:34:47] Josua: Yeah.

[00:34:48] Risto: I’m talking about, or calling this a hairbrush. We were on a downwards trajectory, but the forecast was always that next quarter will be up. And [00:35:00] then we’ll continue going up. And the next quarter came, and we went down. But the forecast was that the next quarter will be up. And then if I take all these forecasts, it’s like a hairbrush, pointed downwards.

[00:35:12] Risto: And then every quarter was [00:35:15] supposed to be, the next quarters were supposed to be a saving quarter. And that was a very painful period because we really did not know what is going on. Why is this happening? Why [00:35:30] are all the forecasts wrong? Oh yeah, all the product launch is late. Why did the technology platform that was supposed to save the company suddenly disappear into thin air?

[00:35:42] Risto: And what, what’s happening? That was a [00:35:45] very difficult period of time, especially as I was just a board member. I couldn’t really influence things. Could ask questions, but didn’t always get answers, but felt responsible. All my colleagues [00:36:00] on the board. And I felt that was really painful. It was more painful than the period when I became chairman and we had huge issues.

[00:36:12] Risto: And the bankruptcy was quite [00:36:15] possible, but at least we knew where we were.

[00:36:19] Josua: Yeah, I can totally understand that even when you have clarity, It gives a much more, it gives more peace, even though, these are four horrible decisions and we have [00:36:30] to pick the least horrible one, but that is so much more, that gives so much more peace than not knowing what’s happening.

[00:36:36] Josua: What was the reason do you think that you or Nokia was in that position where just the forecasts were completely off product launches were failing and you could not [00:36:45] get a sense of what’s going on? What was the root cause?

[00:36:51] Risto: I think there’s a root cause for the technology disruption that happened.

[00:36:57] Risto: And there’s a root [00:37:00] causes for why Nokia really could not prevent that. At least not in a short period of time. And then there are different root causes for why we shut our eyes from what is [00:37:15] happening. And always exercise wishful thinking for the next quarter. Yeah. And those are different causalities.

[00:37:23] Risto: Yeah. Why did technology disruption happen and why Nokia was [00:37:30] unable to react to that? It’s a longer story. We don’t have really time to go to the details. But oftentimes it’s not that you don’t want to change. It is [00:37:45] that change becomes very difficult because everybody wants you to stay the same. Your employees, even if they see that things are not going well, we need to change as long as my job [00:38:00] doesn’t change.

[00:38:01] Risto: And as long as my team doesn’t change. And when everybody thinks like that, then the employees don’t want change. Our customers didn’t want change. [00:38:15] Like Apple and Android, when you buy a new device, the first thing you have to do is you have to register, you have to sign up, you even have to put in your credit card, or most people do.

[00:38:28] Risto: Nokia wanted to do [00:38:30] something like that back then, and the biggest customer said that if you do that, we will never buy a single device from you. And then Nokia leaders were like, hey, but You are selling Apple devices. They are doing that. [00:38:45] Yeah, but that’s a different thing. If you do this, we will never buy a single device from you.

[00:38:50] Risto: Why? The different treatment. Apple was a newcomer. It had different rules. It was small. There was no [00:39:00] history. Nokia was the big market share leader. And Nokia had sometimes treated these partners in a fairly sort of strong handed way. And they want, wanted to pay back. Yeah. [00:39:15] But also, they didn’t want Nokia to become more powerful.

[00:39:19] Risto: So from their point of view, it was better that Nokia becomes a little bit less powerful. They didn’t imagine that Nokia would disappear.

[00:39:26] Josua: Yeah.

[00:39:27] Risto: Yeah. Yeah. So [00:39:30] everybody, all the stakeholders wanted things to remain the same. Yeah. And this is the toxicity in technology disruption, that even if you see it, you may [00:39:45] not be able to influence it or prevent it.

[00:39:50] Risto: And maybe the final sort of data point on this, when Nokia started shipping the Windows phones, the Lumia [00:40:00] devices, in 2011, This was like three years roughly after Android had shipped. And for [00:40:15] every quarter, counting from the shipment, Lumia shipped more devices than Android. Really? So the first quarter, the second quarter of each device life cycle, Nokia [00:40:30] grew faster.

[00:40:32] Risto: But Having started so much later, the head start that Android had was just insurmountable. So I’ve often mentioned how [00:40:45] in the December of 2012, when in the Christmas season, Nokia’s device sales grew to 400, 000 per week, [00:41:00] which was more. than what Android had in their comparable quarter. Android devices shipped a million devices per day during that period.[00:41:15]

[00:41:16] Risto: So even if we had grown faster, we were just so far behind and it would have taken us too long to catch up. And then the software vendors that were thinking, Okay, I have limited [00:41:30] resources. Of course, I have to develop for the iPhone, because it’s where the most affluent users were, and they paid most for software, and they bought more software than anybody else, so I have to develop for the [00:41:45] iPhone.

[00:41:46] Risto: Maybe I have resources to develop for another platform. Should I do it for Android, which is selling a million devices per day, or the Windows phone, Lumia, which is selling 400 1000 devices per week. [00:42:00] There was no question. Of course Android. And this made it very difficult for Lumia to emerge as a major platform.

[00:42:11] Risto: Because there was no interest in [00:42:15] developing no winning software to that. The people who developed for Lumia were the ones who were not winning in the market.

[00:42:24] Josua: That’s so interesting. A counterfactual that might be very difficult to answer but you made a really good point. [00:42:30] And I guess this is like the, what what is it?

[00:42:34] Josua: Clayton Christianson’s innovators dilemma that even if you have this, even if you can see it coming, you might not be able to do something about it. Do you think the right thing for Nokia would have been to, for [00:42:45] instance, to say to that customer, Nope. This is the best. This is where the future is headed.

[00:42:49] Josua: This is what’s best for the user or the customer. And this is the way we’re going to go. And then you might take that short term hit maybe a big hit.

[00:42:56] Risto: And actually that happened. Okay. Nokia [00:43:00] did do some of those things. And some major operators in the world stopped selling Nokia devices.

[00:43:07] Risto: And probably Nokia was a bit scared by those examples. And it, it is. Very difficult when your [00:43:15] shareholders are yelling at you. Yeah. As the share price is coming down, and then through your own actions, you have major distributors stopping selling your devices.

[00:43:26] Josua: Yeah.

[00:43:27] Risto: In the short term, it looks very silly.

[00:43:29] Risto: Yeah. [00:43:30] Why do you want to anger them at this difficult time? And of course the right answer would be that you need to anger your partners at a good time. That’s when the change has to happen. That’s when you have to have the [00:43:45] difficult discussions. But oftentimes when the times are good, you are not willing to seek change.

[00:43:53] Risto: And then when you have to change, the change becomes very difficult to do. And [00:44:00] of course, the big issue for Nokia was also that our final customers, the consumers, didn’t want touch devices. When they were being asked. What form factor [00:44:15] would you prefer to use in the future? 5 percent said touch devices.

[00:44:23] Risto: And the idea that Nokia would, under those circumstances, invested hugely [00:44:30] into touch device development against the will of 90%, 95 percent of Nokia’s customers, it would have really taken a lot of courage and vision, saying that, 95 percent of all our customers [00:44:45] are completely wrong. And now we will bet the whole company and we will just focus on touch.

[00:44:52] Risto: I’m absolutely certain that Apple didn’t believe that more than 25 percent of the [00:45:00] market would ever use touch devices. Yeah. But that, that would have been enough for them. Yes. Yeah.

[00:45:08] Josua: Wow. I think that’s, you’ve painted A picture of how complicated the situation was that I think is rarely understood when you look at [00:45:15] the kind of the external analysis is often much more shallow there’s

[00:45:20] Risto: still just scratching this.

[00:45:21] Risto: Yeah

[00:45:21] Josua: exactly. So I can imagine that it was massively complicated. And then, and as you start, then as chair start to try to navigate the company what [00:45:30] was it how do you go about figuring out the direction? Because. Just from the examples that you’ve mentioned, they require weighing so many different things against each other and thinking about short term effects, long term effects, how it’s going to impact [00:45:45] different stakeholders.

[00:45:45] Josua: It’s, it sounds to me just massively complicated. And you’re trying to do it on the fly with limited data as the market is changing around you, both technology, but also customer preferences. All of a sudden it’s not 5 percent touch point, so how did you go about that? That process [00:46:00] of. Figuring out the strategic direction and renewing the company.

[00:46:04] Risto: Running a hugely successful company is very difficult because the world is open for you. The number of [00:46:15] alternatives for you to choose from is enormous and you have to pick. Sometimes you have to change the course of the company to a completely new direction. Where the world is open for [00:46:30] you. When I became chairman of Nokia, the world was not open for us.

[00:46:35] Risto: We didn’t have enormous number of alternatives. We just had a few. And we were fighting for our life. So the primary [00:46:45] objective is, was to not to lose the company. And for that to happen, we had to sell the mobile device business. to someone. Yeah. So the [00:47:00] horizons narrowed quite a bit. And then, of course, how to do that trick was very complicated and very difficult, because we basically had only one buyer who could buy us, [00:47:15] because of this perhaps a silly exclusive deal we had done with Microsoft on them supplying the operating system.

[00:47:24] Risto: And we were tied to that. We were not allowed to use Android, which was the only other alternative. [00:47:30] So why would anybody else buy us except Microsoft? Because everybody else would be at Microsoft’s mercy if they bought us. And they would be [00:47:45] tied to the Windows phone operating system, which was not winning.

[00:47:48] Risto: The horizons were really narrow, but again, it still doesn’t mean that it was easy and straightforward to get Microsoft to buy us at a decent price. [00:48:00] And then the Nokia Networks situation or Nokia Siemens Networks situation back then was equally complicated. But we had to do something there as well.

[00:48:13] Risto: It was either [00:48:15] sell or buy. So we had two options. Again, it was quite complicated figuring out which was better, and then how to execute, but there was not a large number of [00:48:30] options available.

[00:48:34] Josua: How did you manage the negotiations with Steve Ballmer about the, with the phone acquisition? Well, what I’m asking is, like you said, there was [00:48:45] really only one buyer.

[00:48:46] Josua: The negotiate, that’s a pretty hard starting point for negotiations. Trying to get a good price. You

[00:48:50] Risto: can’t force anybody to buy if they don’t want to. Yeah. But of course you can act in such a way that you maximize the [00:49:00] likelihood that the deal will happen if the other party wants to buy, but you can’t force them.

[00:49:08] Risto: Dealing with Steve Ballmer was a pleasure. It was [00:49:15] very smooth. He was high integrity and he is a high integrity person. I never had any problems with him. Lots of problems with many other people but not with him. And [00:49:30] he has a certain reputation. I never saw anything or I perhaps saw a little bit of that in some larger events where there were lots of people present, but one on one it was really [00:49:45] a pleasure.

[00:49:46] Josua: And like you said, bankruptcy was, I don’t know if near, but at least on the horizon or as a potential outcome at some point. And the transformation has been absolutely huge. I think you mentioned somewhere else. [00:50:00] EV enterprise value at the bottom was like one and a half billion maybe, and then in a couple of, three or four years, increased 20 fold.

[00:50:07] Josua: Headcount, I’m not sure if that’s a it’s, it is some kind of metric increased, I think by tenfold.

[00:50:13] Risto: Yeah, that that’s a bit [00:50:15] misleading in the sense that if you want to be extreme

[00:50:25] Risto: sort of a separate entity with its own culture and logo and [00:50:30] leadership and so forth, even its own board. Then there were only 1, 000 Nokians left after the mobile business was sold to Microsoft. [00:50:45] And then a few years later, after we had acquired Alcatel Lucent, we were back to 100, 000 employees from the 1, 000.

[00:50:55] Risto: But that’s a fairly extreme interpretation of the facts.

[00:50:58] Josua: Yeah.

[00:50:59] Risto: Because you [00:51:00] could also say that the Nokia Siemens employees were already our employees. Yeah.

[00:51:06] Josua: Either way you slice it, there’s massive change happening very quickly. How did you get everybody, how did you handle the [00:51:15] integration? How did you reinvent the, what it meant to be Nokia?

[00:51:19] Josua: Part of Nokia, because you get the example of these people who were, who knew they were going to be laid off and they were working overtime to, to deliver on a product launch. And that [00:51:30] speaks to incredible loyalty and commitment and ownership that obviously Nokia did something right. People believed in the product, believed in it.

[00:51:38] Josua: They loved it. Some portion of the people really love working there. So how do you reinvent this as we’re [00:51:45] integrating people from, all around the world and kind of create, give them a sense of what it means to be working at Nokia?

[00:51:51] Risto: First of all, I didn’t do that. There were hundreds and thousands and tens of thousands of people who did that.

[00:51:59] Risto: What [00:52:00] I tried to do is give people faith. And I always believe that we’ll find a solution. So during the toughest times, I never lost faith. I always believe that we’ll find a way through this. And when [00:52:15] the leader truly believes and talks about that and is open, then that faith tends to spread, and that helps.

[00:52:28] Risto: And then, of course, you have to [00:52:30] be involved in rational decision making. And a very large number of small decisions have to be made in the right order and the right way. And you do your best and some of them you do well and some of them you don’t. [00:52:45] And that’s life. But giving people a direction and faith is paramount.

[00:52:56] Risto: integration of large companies, it’s [00:53:00] almost a hopeless job. In what sense? Because people don’t want to change. Or they, as I said earlier, they won’t change as long as I don’t have to change. And as long as my team [00:53:15] doesn’t change. As long as my team stays in the same location where we have been. And our role and job stays the same.

[00:53:24] Risto: And in a large integration, everything changes. And then you have [00:53:30] a thousand decision makers trying to prevent change. And it’s really difficult. And Nokia didn’t do a perfect job in, in that. I [00:53:45] don’t know how it, how we should have done it better. On any major decisions or major topics.

[00:53:52] Risto: Because we tried to be very fast and we tried to be very decisive. One of the key things that I [00:54:00] felt was truly important was that there’s no confusion about which product lines would continue because it’s so easy to get into a situation that you buy a company that is like [00:54:15] you. For every product that you have.

[00:54:17] Risto: the acquired company will have a competing product. And if the customers remain confused as to which product is the one that will continue, you can’t continue [00:54:30] maintaining and developing both. Because they compete against each other. You need twice the resources and the product is half as good. It doesn’t make sense.

[00:54:40] Risto: And if you allow that confusion to reign, [00:54:45] then you’re doomed for sure. So we, in, in these big topics, we were quite decisive, but then still the cultural clash and the [00:55:00] resistance to change, i. e. how quickly the change happened, was slower than I would have wished.

[00:55:10] Josua: I can imagine there was so much happening beneath, under the surface or, behind the scenes that [00:55:15] you don’t have any idea about when you’re just looking at it externally, but a massive transformation and hugely successful if you consider that the outcome, one possible outcome, was a bankruptcy.

[00:55:25] Josua: I’m sure Nokia would have maybe lived on in some way, but not as this very vibrant [00:55:30] company that it is today. Um, lots still that we could unpack, but I want to make sure we have some time to talk about what you’re doing now or part of what you’re doing now. So in, in 2020, I think you stepped down from Nokia.

[00:55:41] Josua: You’re still on, on some boards, obviously, for instance, F Secure with Secure, [00:55:45] but my understanding is you’re spending most of your time now investing in startups, meeting founders. You have a, Extraordinary track record. I would imagine based, you know, without having any particular data.

[00:55:58] Josua: I think you mentioned that [00:56:00] about 10%, you had 10 percent hit rate in terms of investing in unicorns and I’m guessing at a very early stage. So that must be on a world global level. Very good. So what is it that you look for? When you meet founders, what is it that gets [00:56:15] you to say yes to, you meet hundreds of founders, teams per year, and you’re making maybe, a handful of investment decisions.

[00:56:24] Josua: So what is it that gets risked to say yes to a product or a company? [00:56:30]

[00:56:31] Risto: I have tried to formalize that into a sort of a system or process, but it’s very difficult because it has become more of a sort of a pattern [00:56:45] recognition fifth sense. That is hard to explain, but there are, it’s easy to list a lot of things that are not positive.

[00:56:54] Risto: From an investor’s point of view, when meeting new founders and learning [00:57:00] about new business opportunities, it’s more difficult to say exactly what are the dimensions where one has to be at the level from zero to ten, at least eight or nine. [00:57:15] But there are a few sort of similarities in all the successful companies that I have worked with.

[00:57:22] Risto: One is the leader, the founder, the CEO, [00:57:30] the personality, optimistic, creates the faith that we have discussed, shares the vision, shows the direction, leads from the front, believes in data, [00:57:45] doesn’t shy away from bad news, is able to take tough decisions, These are all sort of [00:58:00] characteristics that basically all the most successful CEOs in the growth companies I have worked with have shared.

[00:58:11] Risto: Of course, in different, at different [00:58:15] levels.

[00:58:15] Josua: Yeah.

[00:58:16] Risto: The shape of their profile is not identical between the individuals, but these are all areas where they have excelled. And I’m looking for founders who would share those [00:58:30] qualities. Miki Kuusiti, one of the founders of Vault, has been lauded by many, but his ability to analyze and build [00:58:45] scenarios using technical tools, of course, was really impressive.

[00:58:51] Risto: in the very early days. His initial business idea was not good at all. It was actually pretty bad, [00:59:00] but he was such an impressive person that I believe that he will figure out a way because as you start doing, you learn and then you typically find [00:59:15] something valuable or valuable opportunity in whatever you immerse yourself in.

[00:59:23] Josua: I think you, you mentioned in a podcast that let’s say, call it the mistakes you made in terms of investing [00:59:30] has been investing an idea that’s good, but run by a team that’s maybe you’re not so sure about. And like you said, in the case of Mickey Koozie maybe the idea is not, let’s say fully developed, but the person is so extraordinary that you’re no doubt that he or she is [00:59:45] going to be able to eventually come up with the right approach.

[00:59:48] Risto: That’s definitely true. But the idea is important as well, at least in the negative sense. So if the idea is one where, [01:00:00] let’s say, the domain is wrong, then I wouldn’t be interested. I’m nowadays mostly investing in companies that do something that I feel is exciting.

[01:00:11] Josua: Yeah.

[01:00:13] Risto: What Miki started [01:00:15] back then was actually not exciting.

[01:00:18] Risto: And I might not invest in that company anymore. Unless the founder is really impressive. I mentioned at another [01:00:30] session recently that I talked with a Swedish 20 year old CEO of a company employing two people. And he was such an impressive guy that I really wanted to invest in his [01:00:45] company. Even if there was really no rationale for doing that.

[01:00:51] Risto: What they were doing was quite interesting. But the guy was such a super impressive person that I definitely wanted to [01:01:00] invest. Didn’t work out because he had investors lined up and I refused to invest in the vehicle that he had set up. It was a safe structure. And [01:01:15] I don’t like convertibles and I didn’t like the way that was set up.

[01:01:21] Risto: So I even suggested to him that sell some of your shares to me and then I’ll be with you for the ride. But of course it would [01:01:30] be very difficult for him to do that with one investor and then everybody else would be on the safe. So it fell through. But I also need to stay true to my I did not join the convertible.

[01:01:44] Josua: Yeah.

[01:01:44] Risto: Because I [01:01:45] didn’t feel that’s the right way. And he stayed true to what he was doing and didn’t sell his shares to me. Yeah. Or a small, very small portion of his shares to me.

[01:01:56] Josua: Yeah. Maybe in a future, future company, life is [01:02:00] long. You mentioned some of the qualities that you look for.

[01:02:02] Josua: Then you have this particular Swedish person. How do you test for those qualities? What is it that, that he does to be able to convince you or give you signals that he has some of those qualities? Like how do you test for [01:02:15] determination? How do you test for that ability to be very analytical and to not shy away from bad news?

[01:02:21] Josua: When you’re just meeting a person maybe one time, maybe a few times.

[01:02:24] Risto: And that’s where we get into the pattern recognition, Uhhuh. . Because it’s hard to explain.

[01:02:29] Josua: [01:02:30] Yes.

[01:02:30] Risto: In some ways. Certain people, when they explain what they have done, what kind of learning experiences they have had, what’s their background, how did they get where they are at the moment, what are they trying to do, [01:02:45] how have they set it up?

[01:02:46] Risto: You get those answers from the story. And, of course, you can ask some questions but you feel, the answer is already, and then there are some other CEOs that talk for an [01:03:00] hour, and you have no clue, no matter how much you try to ask, you really don’t get an answer to the question that you really have.

[01:03:10] Risto: And then, in those cases, you cannot invest.[01:03:15]

[01:03:18] Josua: Let’s just go back to what I thought was interesting. You said at the very beginning that one of your data fellows for F Secure, one of the things that you agreed to very early on was simple language and be [01:03:30] very clear. And I think, so often we see people hide behind technical jargon and complexities.

[01:03:36] Josua: And it sounds like what you’re looking for is someone who has gone through that journey of figuring something out, maybe solving some technical problem very, that’s very difficult, [01:03:45] but has then to be able to distill it into something that can be explained to someone else. Because that’s what they’re going to need to do when they’re recruiting or selling.

[01:03:53] Josua: They need to be able to explain simply. Yeah. And

[01:03:56] Risto: storytelling is a big factor in success. [01:04:00] All sales is storytelling. Yeah. And all CEOs are salespeople. They are either selling to customers, they are selling to investors, they are selling to future employees. They are always selling. Or to current [01:04:15] employees, to build their faith.

[01:04:17] Risto: You are selling a future. And selling is not a negative word in this context. It’s a necessity. And some people [01:04:30] are good at that. Some people are bad at that. Some of the people who are good at that have the brains and the process to put meat around the bones. So they are not selling snake oil.

[01:04:44] Risto: They’re [01:04:45] actually selling the real thing. And those are the people that you want to join. Maybe their first venture doesn’t succeed, but then you join them again for the next one. And [01:05:00] maybe that will be the big success.

[01:05:03] Josua: So I think it’s safe to say that if you think about it from the perspective of an employee looking to join maybe a promising startup, that looking for these qualities in leaders is like a very good way to [01:05:15] figure out which people, which teams you should join.

[01:05:17] Josua: Because it’s like you said, if, even if it wouldn’t work out the first time you make connections with people that are more likely to be able to do Successful things.

[01:05:27] Risto: Just like all leaders are [01:05:30] salespeople. Yeah. Basically, we all human beings, we are buyers.

[01:05:33] Josua: Yeah.

[01:05:34] Risto: We buy to the story of a company and we join them as an employee.

[01:05:38] Risto: We buy in the vision of a artist and we join them as a fan. We all buy all the time, [01:05:45] but oftentimes we don’t think about what we are buying and why we are buying it. Yeah. Yeah. One of the companies where I’m involved with is called Upright Project. It’s a company that has built [01:06:00] a very sophisticated model of basically the underlying causalities behind products and business and impact.

[01:06:12] Risto: And the idea there is to [01:06:15] create a systemic change in the world, in how capital and people are allocated so that the ventures that have the biggest positive impact would get the best people [01:06:30] would get the most capital and at the best price so that they scale quickly and then they help the world to survive.

[01:06:39] Risto: And basically, as I said, we are all buyers and companies like upright. They’re trying to [01:06:45] help the buyers, giving them some science based metrics. But I’m thinking about joining that company. I love the CEO, but what is the company actually doing and what is their impact? And then Upright, for [01:07:00] example, helps you figure that out.

[01:07:02] Risto: So instead of being a tool for only investors, or CFOs doing double materiality assessments and reporting, it can also be a tool for a person seeking employment.

[01:07:14] Josua: Yeah. [01:07:15]

[01:07:17] Risto: Look for the 10 companies in your country having the highest positive net impact. If you go and join them and help them be more successful, you’re actually helping the world to [01:07:30] survive.

[01:07:32] Josua: That’s really that’s really interesting because the allocation problem or what do you want to call it is so enormously impactful, like how we allocate a society, both time and money. And we’ve got, we’ve developed these [01:07:45] very quick. sophisticated markets that for doing that, but certainly there’s room for improvement.

[01:07:51] Risto: Yeah, there’s a very imperfect system.

[01:07:54] Josua: Yeah. Like

[01:07:57] Risto: Donald Trump’s son, I think, [01:08:00] joined a fund that is a anti sustainability fund, which I think is really interesting. Somebody wants to. [01:08:15] invest in companies that are anti sustainability. And then there would be investors who think that, hey, this is a great idea.

[01:08:24] Risto: There’s a great investment thesis. I think I’ll make great money, great [01:08:30] returns from this. It’s, the world is just such an interesting place.

[01:08:35] Josua: Yeah, there’s lots of lots of interesting things happening, for sure. Would be super interesting to keep talking about the startup investing and what you’ve learned from there, the pattern recognition.

[01:08:44] Josua: We’re [01:08:45] almost out of time. So final question you’re one that’s obviously through your startup investing you’re very, you have a kind of keen, you have a pulse on the market and pulse on what’s happening in terms of technology. Is there anything right now at this point, tech trend, [01:09:00] otherwise that’s got your attention that you’re like paying attention to?

[01:09:03] Josua: especially close attention to?

[01:09:07] Risto: There’s many and you have heard about them all, but you need to just dig deeper beneath the surface [01:09:15] to understand what parts of the trend are the ones that, for example, as an investor or as a future employee, you would like to join. AI is an obvious one.

[01:09:28] Risto: We’re still [01:09:30] in the early part of the journey. Yeah. AI, on the other hand, takes a lot of electricity. And clean energy is one of the big issues we face as humankind. [01:09:45] Also, everything that consumes electricity, how do we make it more efficient? For example, electric engines. Electric motors is a very interesting topic.

[01:09:58] Risto: There’s ways to go [01:10:00] there as well. And we will see lots of great innovations. Quantum mechanics, overall, is really fuzzily fascinating and hard to understand, which makes it really [01:10:15] interesting. Anything that is hard to understand is interesting by itself. But quantum computing, absolutely interesting and quite interesting.

[01:10:28] Risto: A big opportunity for [01:10:30] Finland as we have both quantum computer makers and then of course blue force that creates the cooling equipment. So we are in a sort of well positioned in that field. [01:10:45] But there are many other interesting technologies that are applying maybe at least AI in multiple ways. But maybe also in the future, [01:11:00] quantum computing and many others that make these applications of other technologies very interesting.

[01:11:10] Josua: Just to double up on the quantum computing, because it’s something that I have so [01:11:15] little like insight into. How much is hype versus substance in that space, would you say?

[01:11:22] Risto: A company that I joined a few years ago called QuantScient builds a physics [01:11:30] simulation engine or platform, where a company that is designing something sort of very high tech can build a digital twin of the component or [01:11:45] device or process that they are building.

[01:11:49] Risto: And, speed up the development process hugely by being able to see the physical or the physics [01:12:00] outcomes first on a computer screen. And that company is also using quantum computing. So from the beginning, the idea is that [01:12:15] the platform will run on quantum computers. when they are available. And a couple of years back, QuantScient did the first real life physics simulation [01:12:30] on real quantum computer hardware.

[01:12:34] Risto: And this was a sort of world’s first. And it worked. It was a single dimension simulation, so the simplest possible. Now we [01:12:45] have done a 2D. simulation on quantum hardware, and very soon there will be 3D simulations. And we are seeing where [01:13:00] real quantum benefits would start to emerge in this field.

[01:13:08] Risto: So we are close, but not close enough to touch. And it may be that the target [01:13:15] is moving away from us. As we move forward. So it may take five years. May take ten. It might only take three. It’s really hard to say, but it will happen. [01:13:30] And from my point of view, investing in quantum hardware would be a higher risk.

[01:13:37] Risto: Investing in something that is using quantum hardware would be It’s a lower risk because we can use classical computers while we wait.

[01:13:44] Josua: [01:13:45] Yes. So you’re getting you’re lowering the downside, but you’re also getting some of the upside potential.

[01:13:51] Risto: Especially as we have patented many of the quantum technologies we have invented.

[01:13:57] Josua: Yeah.

[01:13:58] Risto: So we are [01:14:00] early, but we are not dependent on that new technology.

[01:14:04] Josua: Yeah. It’s so amazing that we have this system set up of being able to fund both in terms of capital, but also bringing people in these hard deep science projects [01:14:15] that may take many years to fully materialize and start generating cashflow.

[01:14:19] Josua: But when it does, it’s, yeah, it’s it’s such incredible without that, there was be so much innovation that we would lose out on.

[01:14:26] Risto: Yeah, it is exactly like that.

[01:14:28] Josua: And it’s very exciting for you [01:14:30] to be at least, maybe not living in the future, but at least getting, seeing the future before the rest of us as you’re working with all these companies.

[01:14:37] Risto: Yeah, trying to imagine the future.

[01:14:39] Josua: It’s easier to create it than to predict it. That’s the quote. Anyway, Risto, thank you so much for [01:14:45] coming on. It’s been a pleasure. Could continue talking for many hours, but unfortunately, we’re not, we don’t have time for that, but maybe you could do a follow episode and take back on the quantum computing and all the other things.

[01:14:54] Josua: But no, seriously thank you a lot.

[01:14:56] Risto: Thank you

[01:14:57] Josua: for taking the time. Yeah. I’m glad you enjoyed it. Thank you for [01:15:00] sharing so openly all your insights and experience and best of luck with everything that you’re doing and. You’re also, we didn’t get to talk about that, but you’re also involved in various projects to promote like entrepreneurship and let’s just call it progress in Finland and maybe on a [01:15:15] European level.

[01:15:15] Josua: A lot of wish you the best of luck with those efforts as well. Cause it’s, thank you. It’s very much needed. So Thanks.

[01:15:25] Intro: Thank you for listening. You can find all episodes of The Growth Pod on Spotify, [01:15:30] YouTube, and Apple Podcasts.