Category: Op-eds (Page 2 of 3)

Why did we create the Nordic Startup Awards?

Kim Balle, Co-Founder & CEO, Global Startup Awards

Kim Balle, Co-Founder Global Startup Awards

People often ask us why we created a Nordic Startup Awards show. My own family and friends often ask why I spend so many hours on an award show which is surely not a high income project for me. The answer is simple: it is important.

Put your ‘big picture’ glasses on for a minute. We live in a unique time where entrepreneurship and innovation have never been more important. It is a time where technology-, hardware- and software-driven companies change our world in all aspects of our lives. The development is now moving so fast that our societal institutions have a hard time keeping up. This is only the beginning. We have entered the era where an entrepreneur can decide what direction the future will go.

The Nordics should take a leadership role in determining this future. We already have a history of creating amazing innovation not only in terms of technology, but also through organization at the societal level. This is something that is admired around the world. It should be our aim to maintain this status and improve it in the future.

The Nordic Startup Awards are not only about trophies and events. They are about something much bigger. I see the Nordic Startup Awards as a platform or a vessel which can be used to positively impact the regional startup ecosystem by connecting the national ecosystems and showcasing role models and success stories among ourselves and the rest of the world. The end goal is to become such a strong and relevant platform that we can go far beyond the “startup bubble” and into people’s living rooms. (Similar to Eurovision, just more relevant and without the corny music.) With such a strong platform, we can influence and inspire the Nordic people to keep innovating. With interest on such a high level, we can also connect all the stakeholders with politicians and ensure that we, in the Nordics, will have the right conditions to bridge possible gaps between startups and innovation.

The impact of recognition and success stories

In addition to the importance of creating a platform to showcase Nordic entrepreneurship, recognition is the core fuel for the Nordic Startup Awards. I know from my own experience how hard it can be to build a company. When you are working in a startup, you are driven by a passion which can be compared with a wild fire. It is almost impossible to put it out. But every single founder, lead developer, community builder and investor has hit the wall. That dark place where you almost forgot the “why” and the fire is reduced to a small flickering flame.

From Nordic Startup Awards 2014. Image courtesy of Nordic Startup Awards

From Nordic Startup Awards Grand Finale 2014. Image courtesy of Nordic Startup Awards

I know what a big difference a simple pat on the shoulder from someone of esteem can make when building a company. Recognition can lift you up to go that extra mile. It can be an inspiration for others to see that it is possible to succeed even with the most difficult odds. I have no doubt that the effort demanded to build a startup can be compared to the effort needed to win an Olympic discipline. We need to celebrate it.

This is also why quality and high standards is so important for integrity of the Nordic Startup Awards. The trophies need to mean something.

Part of something bigger

Finally I want to mention that Nordic Startup Awards is also part of a growing network. Since we launched Nordic Startup Awards back in 2012, we have expanded to Central Europe with Central European Startup Awards and to South East Asia with Asean Rice Bowl Startup Awards. And after this summer, we will launch Startup Awards India.

From Nordic Startup Awards Grand Finale 2014. Image courtesy of Nordic Startup Awards

From Nordic Startup Awards Grand Finale 2014. Image courtesy of Nordic Startup Awards

Our global expansion means we will be able to connect Startup Awards alumni from across the worlds. The winners of each regional competition will represent the best startups in their region. We plan to launch this initiative in  the coming year under a umbrella we call the Global Startup Awards.

From this work, we have already learned the strength of the Nordic region and the strong brand it has worldwide. We can be a role model for these rapid growing ecosystems. The Nordic Startup Awards will help connect Nordic startups to new markets, talents and technologies, and position the Nordics become a global leader in technology and innovation.

Join us for the Grand Finale

Back in 2014, Iceland won Startup of the Year with Plain Vanilla, which elevated Iceland to a heavyweight in the Nordic startup scene. People were wondering who Plain Vanilla was, since the name was not as well known in the other Nordic countries back then. But the numbers spoke for themselves, and Plain Vanilla was a sure winner. (Here is recent interview we did the the founder, Thor Fridriksson).

Since 2014, the startup ecosystem in Iceland has grown even stronger with the help from community building organisations such as Icelandic Startups. It became clear to me when I visited Icelandic Startups during their Golden Egg competition. I was blown away with the high startup activity on Iceland.

This is why it is also super exciting to invite everyone to Iceland for the Grand Finale. On the 31st of May at the Nordic Startup Awards Grand Finale, hosted by our amazing country partner (Icelandic Startups), we will bring together talent from across the Nordic startup scene to the Harpa Concert Hall in Reykjavik, where companies will compete to be the best among the Nordics. The winners were selected through an rigourous process and announced at the national events (you can see a list of the national winners here).

We can’t wait to announce the winners in the beautiful surroundings of Harpa. 

Then event is fully paid by the amazing local sponsors and it is free of charge.

Signup here.

Kim Balle is Co-founder of Global Startup Awards / Nordic Startup Awards, Owner of DROBE and founding member of IoTPeople 


Why we’re doing a hackathon: to increase FinTech innovation

Einar Gunnar Guðmundsson. Corporate Entrepreneur at Arion Bank.

The Icelandic banking infrastructure is unique. This statement may sound awkward in light of a total collapse of the Icelandic banking system in 2008, yet what I mean is from a standpoint of something else. Most banks globally today are highly focused on payments, trying to improve speed where individuals and companies transfer money. Money transfer may take up to three banking days between banks even within the same country or city. The US still heavily relies on checks for money exchange. In Iceland it happens instantly and has done so for almost 20 years. If I transfer money to my wife who has an account at a different Icelandic bank than I do, she only has to push F5 on her keyboard immediately after I make the transfer, and the transfer amount is visible on her bank account. How is that possible? Well, it’s simple. There is a common core banking platform for all the Icelandic banks (jointly owned by the commercial banks).

Good infrastructure may have slowed innovation down in Iceland

For the above mentioned reason, Icelanders have had little need to improve payments. Only in the past year has Iceland seen new money transfer products like Aur and Kass, where you only need a mobile number and registered debet or credit card within the app to transfer money between individuals, regardless of who your commercial bank is. It’s like Danske Bank’s Mobilepay, the Swedish Swish or the Norwegian Vipps.

My point is that, until now, there has been relatively little urgency in developing either great Icelandic consumer or business financial applications.

Arion is hosting a hackathon to speed up innovation

Arion Bank is the first bank in Iceland to host a hackathon. Arion Bank’s FinTech Party is the first hackathon where hackers from established IT companies, the startup community or universities can work on several APIs to hack and develop new financial services.

While hosting a hackathon is no news in itself, the Arion’s FinTech Party is Iceland‘s first FinTech hackathon and several APIs will be available (see below) to participants, who can hack away for 30 hours on June 3-4 2016 in Arion Bank headquarters.

Who should participate and why?

Participants are likely to be established IT companies, startup companies and university students (computer science, engineering, business)

There are three primary reasons for participation:

  1. Products developed may lead to a revenue generating business opportunity for participants
  2. Code / IP and therefore potential revenues belong to the participants
  3. Meeting new people and guidance from the API providers is valuable. And fun.

Arion’s FinTech Party offers several APIs

We at Arion Bank have been working a great deal with with Icelandic startup ecosystem since 2012 since the bank owns two business accelerators, Startup Reykjavik and Startup Energy Reykjavik, where the bank invests seed money in exchange for an ownership stake. Understanding how startups approach problem solving, along with international digitalisation trend/changes in banking, has lead us to hosting the hackathon. We have also offered several companies to offer their financial APIs in our hackathon. They are:

  • API Arion Bank –
    • Transactions on debet and credit cards
    • Claims – initiate a claim to a unique personal ID number that shows in that person’s / company’s internet bank
    • National registry – Lookup in the national registry by their unique ID number
    • Currency valuations
    • Links to Arion Bank‘s sandbox and Github
  • API Valitor
    • Payments – Send and receive a payment with a virtual credit card
  • API Meniga
    • Datadump on the fast food industry. All transactions over a 12 month period in Meniga’s database related to the Icelandic fast food industry. Data is non-personalized.
  • API RB
    • Mobile banking services
  • API Kodi
    • Market Data – closing day price of listed equities on the Nordic equities listed on the Nasdaq OMX
    • Link to API Kodi descriptions
  • API Advania
    • eSignature

All APIs in the hackathon are open REST APIs.

We are quite enthusiastic about these different APIs, since a combination of them, or seperate ones, gives the hackers vast opportunities in developing great products. Real products or features for real customers, consumer or business ones.

Intellectual Property belongs fully to participants, not to the bank

Different banks may take a various approach on hackathons. Some decide that whatever code is written is theirs but give the participants some perks to sweeten the deal. We understand that for most developers, the right motivators need to be in place. That‘s why any code written will belong to the participant teams, i.e. the Intellectual Property belongs to those who write the code. Arion bank will have a non-exclusive right to use the applications for twelve months and a first right of refusal to buy or use should they be commercialized. Those are fair terms for both sides.

Let’s hope all of the above leads to growth hacking post hackathon. Happy hacking!

The author is a Corporate Entrepreneur at Arion Bank. He occasionally blogs at Find him on Twitter: @einargunnar

Stripe Atlas is Huge, and Even More So for Iceland

This week was the week of Stripe Atlas, the new service offered by payment company Stripe that allows companies all over the world to (1) incorporate a Delaware C-Corp, (2) open a U.S. bank account with the Silicon Valley Bank and (3) immediately start using Stripe for payment processing. In addition, I’ve learned through our Slack community that AWS will be giving a $15,000 credit to all Stripe Atlas beta users. Talk about a great deal.

From the Nordurskaut Slack Community

From the Nordurskaut Slack Community

Stripe has also partnered with a number of startup incubators and accelerators, and I do hope, Startup Reykjavik will be one of them soon.

However big of a deal this is in general, the game changing effect this can have on Iceland is even bigger.

While under the capital restrictions, people are not allowed to found companies outside Iceland. However, the Central Bank has been known to grant retroactive exemptions to the restrictions, when people have done so. There are several notable Icelandic startups that have done this, often tied to investment from non-Icelandic investors who (obviously) don’t want to lock their cash in here.

Now, with the incorporation of a Delaware C-Corp, and a U.S. bank account both “one click away” creating a U.S. company will become much easier for Icelandic entrepreneurs.

That makes it easier for an Icelandic founder to incorporate in the U.S. than in Iceland. You need 500,000 ISK (~$3,800) in equity to start a limited liability company in Iceland. Of those 500,000 ISK, around 130,000 ($1,000) is just paying for the paperwork being processed. Stripe Atlas beta users will pay a $500 one-time fee, in addition to the filing fees needed for incorporation.

The Minster for Industry and Innovation announced last year that there were plans to make this easier and cheaper, but one could argue that it’s too late. Why incorporate in Iceland when you can incorporate in the U.S?

Obviously, it isn’t that easy. There’s paperwork in the U.S. just as in Iceland, and while Stripe Atlas has been announced, it still has the “too good to be true” ring about it. Norðurskautið will in the coming weeks look into if and how Stripe Atlas will truly be available to Icelanders, and try to gauge the bureaucratic effort needed to sustain a C-Corp from Iceland.

This development will hopefully lead to pressure on the Central Bank, in clarifying and communicating its strategy in regards to startups and the capital restrictions as well.

Norðurskautið covers the Icelandic Startup and Tech scene. Follow us on Twitter or sign up for our mailing list to keep up to date. You can also join our Slack community –

Nominations are open for the Nordic Startup Awards

Who are the startup heroes this year? The nominations for the regional finals of Nordic Startup Awards are open. Do you know what the Nordic Startup Awards are? Nordic Startup Awards is a series of events in the Nordic countries, connecting and paying tribute to the Nordic startup ecosystem. The competition brings together all the sectors in the ecosystem, awarding startups, investors and accelerators to office spaces and journalists.

Salóme Guðmundsdóttir, CEO Icelandic Startups

Salóme Guðmundsdóttir, CEO Icelandic Startups

Nominations for the awards are open until February 29th. We encourage you to nominate those who you consider to be true startup heroes and deserve a recognition. You can nominate anyone in the following 13 categories; 1. Best Exponential Startup, 2. Best IoT Startup, 3. Best Newcomer, 4. Best Bootstrapped, 5. Best Social Tech Startup, 6. Best Business Angel, 7. Best Investments Company, 8. Founder of the Year, 9. CTO Hero, 10. Startup Media of the Year, 11. Best Office Space, 12. Best Accelerator Program and 13. Startup of the Year.

When we close for nominations, a national shortlist will be announced. Then you will get the chance to vote your favorite – your vote will count with the votes of a regional jury. The regional winners in each category will be announced during an Innovation lunch event in Reykjavik on April 26th. The Icelandic winners along with the other Nordic winners will be announced at the Nordic Startup Awards’ website and again you get the chance to vote.

We are extremely proud to share with you that the Grand Finale will be held in Iceland this year in partnership with Icelandic Startups. We are looking forward to meeting our Nordic startup friends and celebrate this year’s results on the 31st of May.

Awards that have gone to Iceland since its start two years ago are Plain Vanilla as the Startup of the Year 2014 and Startup Reykjavik, the best accelerator program in 2015.

Nominate here.

Salóme is CEO of Icelandic Startups, an organization that helps startups by accelerating their businesses and connecting them with experts, investors and leading startup hubs abroad. Icelandic Startups are a organizing partner of the Nordic Startup Awards.


Cookie Cutter Venture Capital

Last week I wrote about the cultural difference between entrepreneurs in the Nordics and in Silicon Valley. This week I want to talk about the cultural differences between investors. In each country the investors and the investment climate shapes how startups get funded and in turn how they end up looking from an investment perspective. For example, if there is a lack of good seed and angel funding in the country the startup comes from, then the cap table will get quite crowded with friends, family, and fools.

Gísli Ólafsson

Gísli Ólafsson

The same lack of investors at an early stage may lead to the entrepreneurs to be required to give up control of more of their startup than otherwise, as the investors have a stronger case for lowering valuations and asking for larger share of the company, since if they don‘t get it, the startup will die an early death.

We see these differences even between the Nordic countries, but of course the difference is biggest between the Nordics on one side and Silicon Valley on the other side. I like to explain it that each country has a different cookie-cutter that is shaped based on the different investment culture and environment. If you looked at the cookie-cutters from the Nordics, most of them would be similar in shape, yet with small differences. However, when you look at the Silicon Valley cookie-cutter, it looks quite different from all the others.

These differences lead to the fact that when a company attempts to raise capital from a location other than where they came from, investors often dismiss the opportunity, simply because it does not fit their “investment template”.

A commonly referred to example of this is that Silicon Valley investors usually want companies they invest in to be “located in the Valley”. Many foreign startups therefore put up an office (often temporarily), simply to enable the VC to mark that off their checklist of template matching.

While having a presence in the Valley is certainly an important step in molding a startup into the Silicon Valley cookie-cutter template, there are a larger number of cultural differences that need to be worked on before a startup is Silicon Valley investor ready.

At Beringer Finance we spend most of our time helping startups make the transition from the Nordic investment environment to the one in Silicon Valley. Taking startups, across the bridge we have built between the Nordics and Silicon Valley, is mainly focused on helping the startups and the entrepreneurs adapt and mold their startup into what the investors in the Valley are looking for.

The truth is that even if you are able to leverage your network to open up doors up and down Sand Hill Road, the effort of putting on a roadshow is a complete waste of time if this cultural fit has not been addressed before you arrive. Sadly, we have seen too many companies that have not been successful in their attempts to come over to the Valley to raise capital, simply because of this.

Having spent the last decade working on similar cultural bridge building within the humanitarian community, this is an area which I love to work on. The humanitarian ecosystem is certainly different from the startup and venture capital ecosystem, but the lost opportunities due to cultural misalignment are just as many.

I would love to get comments from entrepreneurs and VCs with great examples of cultural differences they have seen between the cookie-cutters of different investment cultures.

Gisli is a Partner & CEO USA at Beringer Finance – his Twitter handle is @gislio

Norðurskautið covers the Icelandic Startup and Tech scene. Follow us on Twitter or sign up for our mailing list to keep up to date. You can also join our Slack community –

Selling the Future

During a panel discussion a couple of months ago, a number of successful entrepreneurs from the Nordic countries (Iceland, Sweden, Denmark, Norway, and Finland) were asked what was the most difficult part about raising money here in Silicon Valley from a cultural perspective. One of the panelists said it was the fact that venture capitalists in Silicon Valley expected to be sold the future.

Gísli Ólafsson

Gísli Ólafsson

People in the Nordics are culturally very humble by nature. They are not used to bragging about their success and don’t want to exaggerate what they have accomplished. This becomes especially true for entrepreneurs from the Nordics. They are used to talking about what they have accomplished and not what they are planning to do. If you really push them, then you can get them to tell you what they are planning to do over the next few months, but looking 2-3 years into the future is often very hard for them.

I often get the opportunity to see as Nordic entrepreneurs pitch their startup to venture capitalists from Silicon Valley and I can confirm that this observation by the panelist is very true. As I work with entrepreneurs from the Nordic countries I constantly have to push them to sell the future – sell their vision – sell the true reason why they founded their startup.

A side effect of this cultural humility is that entrepreneurs also often aim too low in their funding requests. They often ask for funding to support sales and marketing in new territories, while leaving out requests for improving and continuing R&D. It is as if they think they should put everything on hold while they sell what they currently have…and then 18 months later they can continue development.

When you compare this to the typical American entrepreneur, who has almost been taught to sell their vision of the future from preschool, it is no wonder many of the non-US startups have a hard time getting funding from Silicon Valley. I often joke that in my new role my title should be Cultural Translator.

For those of you still reading…and still wondering why there is a picture of a moose at the start of this article…then it is maybe because culturally we would rather talk about Moose companies than Unicorn companies in the Nordics 🙂

Gisli is a Partner & CEO USA at Beringer Finance – his Twitter handle is @gislio

Norðurskautið covers the Icelandic Startup and Tech scene. Follow us on Twitter or sign up for our mailing list to keep up to date. You can also join our Slack community –

The Technology Development Fund Needs Refactoring

Yesterday the Icelandic Technology Development Fund announced what projects would receive grants in 2016. The TDF is funded by tax money and operated by Rannís, the Icelandic Centre for Research. It has been an integral part of early stage funding of companies, and many of Iceland’s most prominent technology companies have received grants from the institution at some point in their lifetime.

Kristinn Árni L Hróbjartsson

Kristinn Árni L Hróbjartsson

Yesterday’s list of 48 grantees includes a wide range of projects, from boot-strapped startups, to recently funded companies such as Sólfar, to university based research projects. (Sólfar is on the list for a Project Grant, typically $100,000 per year for up to 3 years. Sólfar announced a €2 million funding round 4 weeks ago.)

Interestingly, some of the companies don’t match the expected profile of companies needing grants. Instead they represent a regular member of the receivers of TDF grants: big, profitable companies, that seemingly should be able to fund their own R&D.

It sounds a bit strange, that Iceland’s biggest funder of early stage innovation and technology approved a grant to Hampiðjan, a multinational company started in year 1934 (not a typo) that reported €7.7 million in profits in 2014.

Similarly, this year a grant was provided to MS Icelandic Dairies. The company is a de-facto monopoly of milk products (we’ve heard horror stories and had resolutions and fines from the Icelandic Competition Authority on that company’s behaviour) a similar grant.

Both are project grants – usually around $100,000 per year for up to 3 years.

In 2012, Marel (publicly traded as MARL with a current ISK 183 billion (~$1.4 bn)), received around $170,000 for R&D. The same year, Matís, a government owned company (.ohf) received a 3 year project grant. That company is up to 30% funded by the Ministry for Industry and Innovation. (Matís has received grants from the TDF in 2013 and 2014 as well).

The reason for this is simple. The Technology Development Fund’s purpose is to fund technology development and research. These allocations are therefore (to my knowledge) according to its stated purpose and operating guidelines.

Is that however, what we want, and what the small but growing entrepreneurial, innovative community in Iceland, needs?

The Fund’s stated purpose is to “support research and development activities, which aim towards innovation in Icelandic industry.” It is broad and vague, and maybe purposefully so, to enable the fund to grant funding to a big variety of project. I think, however, that this purpose needs revisiting.

The Ministry for Industry and Innovation is today announcing its action plan to help entrepreneurs and startups. One of the likely big actions is increasing the funds available to TDF by ISK 975 million (~$7.5 million), bringing the total amount available for the year 2016 to ISK 2,347 million. That’s almost doubling the budget for grants.

Are we sure that this version of TDF is what we want, need and should have?

I believe, that before we start shovelling these massive amounts of cash into TDF, we should zoom out and think: Is there maybe a better way to do this?

My thoughts are the following.

First of all, I think it’s utterly ridiculous that tax-payer money is being used to fund the research of big, multinational, profit bearing private companies. This could be addressed in the fund’s rules.

Secondly, I think the fund’s focus should be made clearer. Funding everything from research in universities to the development of computer games is a very broad focus. The fund could be split up to adapt the application and selection process to each of these cases.

Thirdly, instead of adding this money to a fund that gives out grants, we should look into whether a matching scheme could work, similar to Israel’s Yozma, which matched VC investments coming into Israel.

The Icelandic startup scene is most definitely growing. We need to make sure that the support system grows with it, in the right direction.

Kristinn is a co-founder of Norðurskautið. He’s on Twitter as @kiddiarni.

Norðurskautið covers the Icelandic Startup and Tech scene. Follow us on Twitter or sign up for our mailing list to keep up to date. You can also join our Slack community –

Failures and Job Hoppers

Society is one of the most influencing factors on how we shape our career paths. We all want to place ourselves as an ideal marionette of those entitled to pull the strings and define the rules of the game. Some of you may already know how dropping out of school is labeled as an act of irresponsibility and some of you may already know the feeling of being discredited by colleagues, friends or family who lack the nerve to rip up the roots and move on to greener pastures, whether it be a new job or an entirely new venture.

Kristján Pétur Sæmundsson

Kristján Pétur Sæmundsson

Nowadays, we have access to vast amount of information that can help us get the necessary feedback to validate our plans. Startups create a wide range of opportunities and by doing so, they tend to scream for attention wherever they can, in hope of attracting great talent.

Most of them fail, become mediocre and in a sense unsuccessful, while some close millions in risky seed rounds. I think we’ve managed to grasp the fact that going out on a limb, taking a chance by risking everything on one turn of pitch-and-toss, for the slim possibility of building something significant and worthwhile, might be the best place to align your mindset with your end goal. Furthermore, such ventures are likely to accumulate knowledge that not even one of the best schools could ever teach you – you have to make your own decisions.

I am sure you’ve read books and articles on success stories from entrepreneurs, leaders and companies that seem to somehow stand out from the crowd. They wrap you up in the idea of success, but often fail to mention the importance of failure on the way.

Too often do we give little regard to those whose doors close long before they are opened –  those who fail small and early. The startup community gives credit to failure, but only when it comes to well known companies, the media help in growing into successful role models, only to watch them fall apart, giving us the idea that they “fail gracefully”, in order to rise up even stronger, adding more value to their comeback.

Seldom do we pay attention those who struggle on their way towards success and fail too soon, not focusing on the importance of the paradoxical side-effect of failure – the learning experience that comes along with it. As long as you are fully committed and as long as you put all your energy and efforts in it, success and failure go hand in hand, giving you important feedback to learn about yourself.

This lack of regard is also valid for those sometimes referred to as “ job hoppers”, those who, for one reason or another, have changed jobs frequently in the past. In terms of employment, we often put too much emphasis on searching for educational background and honorary degrees. A short tenure doesn’t constitute failure, just as an equally long formal education doesn’t constitute success.

The fact is that cultural fit, challenging environments and appropriate development are just as important to the employee as they are to the employer, and they hold the right to assess their relationship with the employee regularly, just as the employer does towards them.

I for one would probably qualify as a job hopper. I have held four positions in different companies, in less than four years. Each of them forced me to adapt, learn and expand my vision upon different procedures and strategies. Every “hop” made me able to take on new matters with a range of previous experiences to draw from.

I challenge you to think about each role you’ve held and list up a few things that you picked up on or developed at each place, regardless of the length of your tenure. Then, compare what you learned during your first year within a company, to what you learned the last year within the same company. Compare the educational value of  both your wins and your losses. Which had a greater impact on your professional path and personal development?

Building on this introspection, do you think your position towards potential talent may need to be reassessed?

The author is a Recruiting Manager at TeqHire. is a specialized recruiting service for the tech industry that operates in Iceland, Romania and Berlin.

Norðurskautið covers the Icelandic Startup and Tech scene. Follow us on Twitter or sign up for our mailing list to keep up to date. You can also join our Slack community –

Last four years in hindsight

In early 2008 I moved to Iceland after five years in Stockholm. In the next two years, I experienced, as many Icelanders, extreme changes in both the economy and mindset of people, both locally and non-locally. I will not dwell on that issue since so many have written and shared their thoughts on what could have gone better.

Since January 2010 I have worked for Arion bank, the second largest bank in Iceland. The first two years were in the Recovery department, pretty much restructuring of overleveraged balance sheets of Icelandic companies. It was a challenging task, but an experience I learnt a great deal from.

Einar Gunnar Guðmundsson

Einar Gunnar Guðmundsson

In late 2011 I switched course. I decided to continue to work for Arion bank but under very different circumstances, namely to build the bank’s work for and with the startup community in Iceland. And what a journey it has been. In the aftermath of the global financial meltdown, few years had to pass before most people and companies had either the energy or will to shift their efforts to something constructive rather than just coping with reality.

Today, Iceland has a thriving and vibrant startup community. Two business accelerators are in operation, the third one is planned in the first half of 2016, international conferences on Iceland are regularly held, three new VC funds (Eyrir sprotarBrunnur and Frumtak II) have started in addition to the state owned NSA.

The accelerators are: Startup Reykjavik, Startup Energy Reykjavik and Startup Tourism. I have had the pleasure of building the first two ones at Arion bank with other people, since the bank owns these two. More on the accelerators later.

Two supporting entities to the community are in operation: Firstly, the state operated Innovation Center Iceland (NMI) and the privately owned non-profit Klak Innovit.

Additionally, there are several co-working spaces operated by several parties. The Icelandic Ocean Cluster hosts dozens of companies in all maturity stages in addition to investors at the beautiful harbor side downtown Reykjavik. Can’t help to love their place. NMI operates a few co-working spaces: Center for the creative industries at Hlemmur square consists of Hellirinn (The cave), Gasstöðin (The gas station) and Tónlistarklasinn (The Music cluster). Other spaces are availble from NMI’s side in Reykjavik and in towns close to Reykjavik. KPMG Iceland has one floor for startups, mostly in software. Innovation House, founded by Opera’s founder Jon Tetzchner has great facilities and hosts 15-20 companies on a regular basis.

My point is that almost none of these initiatives were available five years ago. The same trend has happened in Iceland as elsewhere in the Western world, where startups and entrepreneurs have started to be noted, not only by media, but by investors and the general public. Not to mention clients that gain value by purchasing their products and services. Building a thriving startup community does not happen overnight. It takes relentless efforts of people in various positions in society to do so. But mostly by entrepreneurs. What has happened is the cliché “Build it and they will come”, and Iceland is witnessing that these days. And there will be more coming.

Einar Gunnar Guðmundsson is a corporate entrepreneur at Arion Bank. This post was originally posted on his blog.

Norðurskautið covers the Icelandic Startup and Tech scene. Follow us on Twitter or sign up for our mailing list to keep up to date. You can also join our Slack community –

Iceland: VR Valley?

In a popular blogpost from earlier this year the investor, tweeter and entrepreneur Marc Andreessen discussed a politician’s pipe-dream: what it would take to create the next Silicon Valley.

In essence his argument is simple: Don’t even try. Trying to mimic an organically grown, entrepreneurial community with governmental stimuli won’t work.

But policymakers shouldn’t be trying to copy Silicon Valley. Instead, they should be figuring out what domain is (or could be) specific to their region — and then removing the regulatory hurdles for that particular domain. Because we don’t want 50 Silicon Valleys; we want 50 different variations of Silicon Valley, all unique from each other and all focusing on different domains.

Why am I quoting this almost year-old blogpost?

Two weeks ago, two Icelandic tech companies, CCP and Sólfar, announced funding rounds, $30 million and €2 million respectively. In both cases, Icelandic investors participated in the funding rounds. In addition to this, Eyrir Sprotar announced an investment in Mure VR, makers of Breakroom VR, a little under a year ago (December 30, to be exact). This amounts to 3 VC investments in Icelandic VR efforts in under 12 months.

This, by my accounts, is a lot. Especially for a small fledgling ecosystem like Iceland’s.

Foundations for a cluster?

For an industry cluster to become possible, and more importantly, globally competitive, many factors are needed. It might be hard, but it is definitely possible. We’ve already seen the rise of the Icelandic Seafood Industry which is now one of the most competitive and best run seafood industries in the world. Maybe the next cluster is the VR cluster?

Even though the recent VR investments are focused on one industry (i.e. Virtual Reality), the companies and their products are fairly diverse. CCP is pure gaming, launching two games in 2016 – Eve Valkyrie and Eve Gunjack. Sólfar just announced Everest, which by accounts seems more of an experience, or attraction. Mure VR is developing Breakroom – a VR product for the workplace. This means that we have 3 funded VR companies that are experimenting with three different aspects of the VR platform.

Facebook's Mark Zuckerberg playing Eve: Gunjack on the Samsung Gear VR

Facebook’s Mark Zuckerberg playing Eve: Gunjack on the Samsung Gear VR

We might have the beginning of a VR industry in Iceland, where Iceland is one of the places where talent interested in VR goes to work. Where VR companies build offices and where VR innovation happens.

Icelandic regulators should pay close attention. If these companies start gaining traction, officials should make sure the environment here is great for starting VR businesses. They could encourage the adoption of VR technologies, and fund research by Universities and academia to further innovation in the sector. How exactly regulators should enable a VR industry is not mine to say, but to quote Andreessen, the government should do what they do best: “create, or rather, relax laws.”

Risky business

While I’m ecstatic that entrepreneurs and innovators in Iceland have been able to secure the confidence and cash of investors, we must remember that VR is a very untested market. Several days ago, EA Games, one of the gaming industry’s giants, announced that the company would not invest heavily in VR gaming for the next several years. The reason: they don’t believe the market is there or will be there for the next 5 years.

This, of course, could be the arrogance of the incumbent. Incumbent smartphone manufacturers didn’t believe people wanted touchscreens until the iPhone came, and then it was to late for the incumbents.

Analysts don’t agree either. Kzero, a consultancy group in the virtual space, estimated that the consumer VR market will be $5.2 bn in 2018. Another consultancy, Digi-Capital, estimates the joint AR (augmented reality) and VR market to hit $150 bn by 2020 (and the VR market in 2018 supposedly will be a little over $15 bn according to their graphs). The third group, Grand View Research, estimates VR gaming to hit $9.55 bn by 2022. In short, a lot of unknowns.

The prospects of Iceland becoming a hub for VR increased dramatically last week, but it’s still far from certain. To get there, we need to help the current companies succeed, enable new ones, and create an environment where this industry can prosper.

Norðurskautið covers the Icelandic Startup and Tech scene. Follow us on Twitter or sign up for our mailing list to keep up to date. You can also join our Slack community –

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Nortstack – Reporting and analysis of the Icelandic startup scene