Some thoughts regarding growth

Some stories about the growth

Growth is not the a self evident target for every company. In fact primary goal for many entrepeneurs is not the growth it self, but another goal and the growth just happens to take place while achieving some other primary targets (Carsrud and Brännback 2011). In fact high growth is quite rare and too often a popularized topic by the media. The reality is that from the start-ups only 3% manage to grow over 100 employee enterprise.

Growth is linear only seldomly. Must of the todays success stories are the very same companies that struggled sersiously and a long time prior their first success. One of the leading drug development companies Amgen, which was created in 1980´s, had to work several years before their first launch. In the end the company was saved by the drug that was listed as an after-thought. Rovio as another example had to develop 51 games before its they finally started to rock and roll.

Which is more important growth or the profitability? Shareholders expectations are not automatically in harmony or symmetry. If we over look the profitability, does the market share increase and growth turn to a profitability? If you are an athelete, will your fat turn to a bit more useful tissue – muscle – if you train hard enough? Quite a few CEO´s keep asking their boards and their main owners over the years, which parameters should he prioritize. Is it ok to divorce the growth from the profitability?

High-growth is rarely the prerequisite of high profitability. Recently several studies (Markman and Gartner 2002; Brännback et al. 2009;Davidsson et al. 2009) show that in reality high growth companies end up being partial disappointments. As an entrepeneur I have learned that it is all about the context. Growth and even more a profitable growth is an outcome of multiple parameters that correlate with each others in some still unkonwn mathematical form.

It always starts from the right people, who form together the first business plan. The first business is never the last business plan. Your company can be a high growth company already next year, and if not it may be one after 15 years. ”Agility” is equally as good value for the company as as ”patience”.

Start-up culture in Finland

Briefly. What type of start-up culture do we have in Finland? Does the culture or ours support those brave people who have decided to take a concrete personal risk in becoming one? I still consider my self as a young entrepreneur having experience so far concrete hands on experience only in less that 10 projects and companies.

Most of them are doing well and one of them not (at the moment). All together I just counted that companies I have been constructing have generated a quite reasonable amount of work in Finland, over 1.000 man years equalling about 20 000 000 euros of taxes paid to the Finnish government. For a country boy this sounds like an ok figure.

The Finnish start-up is typically a company that aims only to survive. In USA or in the other best practice countries like Israel the start-up culture can mean a completely different issue and story line. I have seen how our fellow start-ups aim to become something bigger. They aim for the high risk to achieve high reward and they are proud to tell that a loud. In our culture it is still wrong to tell about your targets in public.

As a start-up company you feel continuous pain automatically. You feel the pressure every day of financing, first customer feedback, delivery issues, personnel topics, PR and everything. Still I would claim that in our culture in Finland there is one additional component to be afraid of. Public still does not like you. Post II world war companies benefited from the poor neighbor Russia allowing us to grow some successful companies like Nokia. Those companies are ok. There is also a heritage of old family owned subsidies generating wealth to our society. When is comes to the new “economics” there are too few companies giving solid example to our society (successful start-ups listed).

In Israel public support (government) gives grants only to those companies that aim for the high risk and the amount of decision makers (economical development authorities in public sector) equals only 1/10 in comparison to ours. They consider them self as enabler not gatekeepers. Most of them also have personal experience of running concrete business them self.

We have an issue. In 10 years high tech export has dropped from 25% to only 6%. Start-up´s with high ambition level is the only change to make a difference. The existing culture should change embracing risk taking start-ups. Humble opinion.

 

 

 

 

 

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Pelkästään EU:n alueella osteoporoottiset luun murtumat aiheuttavat noin 40 miljardin euron vuosittaisen kustannuksen yhteiskunnalle. Yksi suurimmista ongelmista on heikko diagnostiikan saatavuus, koska luuston tilaa tutkitaan suurissa sairaaloissa ison tilan vaativalla röntgenlaitteella.

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