This document summarizes a study on the growth ambitions of Finnish technology startups. Interviews were conducted with 21 Finnish startup entrepreneurs at the Slush 2015 startup event. The findings show that expressed growth ambition levels varied greatly, from very modest to high ambitions. The differences in ambition levels could be attributed to factors like the target market, business model design, personal characteristics of the entrepreneur, and external stakeholders. Additionally, entrepreneurs may express different ambition levels depending on the context or phase of the startup. The implications are that startup support should consider different types of startups have different needs, and support may need to be targeted based on growth ambition level.

1. Entrepreneurial innovators’ growth ambitions
– Case of Finnish technology start-ups
ISPIM 22.6.2016
Arto Wallin, Katja Henttonen, Kaisa Still
Technical Research Centre of Finland, VTT

2. 2
AGENDA
1. Introduction
2. Research design & question
3. Findings
4. Implications
5. Questions?

3. 3
… what start-up entrepreneurs actually experience and say?
What is the image about Finnish growth-startups…

4. 5
RESEARCH QUESTION:
How technology entrepreneurs participating to the start-up event
express their growth-ambitions (behind the scenes and in public)?
Main research question

5. 6
 Context of the study
 The research was conducted as a part of the international R&D&I project
(Accelerate ITEA2), which aimed to develop tools to accelerate start-up innovation
process.
 Interviews in Slush 2015 – biggest startup event in Europe
 Case study
 Literature review on startup innovation growth-ambitions
 Data collection
 Short (10-15 minute) semi-structured interviews during SLUSH
 Document analysis
 Data analysis
 27 interviews analysed by the three researchers using content-coding and theme based
categorization
 21 Finnish entrepreneurs were selected for the detailed analysis
Research design (1/2)

6. 7
Start-ups in different phases of startup innovation process
Research design (2/2)
Table 1. Context information of the 21 Finnish start-ups studies
Year
founded
2010 or before
2011
2012
2013
2014
2015
5 companies
1
4
5
4
2
Phase Ideation
Problem-solution fit
Product-market fit
Scaling
2 companies
2
10
7
”Start-up is company searching for scalable and repeatable business model”
- Steve Blank

7. 8
Expressed growth-ambition levels very from very modest to high
Findings 1 – Expressed ambition levels
Table 2. Growth ambition levels of the companies
Growth
ambition
Description Examples
Low Modest growth expectations,
pessimistic view on the success
of product/company in large
scale
”should test with international clients”
“[in five years we have] products in the
market”
“we focus so far on Finnish markets,
international scaling will be on later phase”
”concentrating on core business”
Moderate Clear international growth
expectations, but the ambition
level is not particularly high
“maybe double the turnover”
”international player”
”turnover to millions”
High
High long term growth
expectations, or rapid short term
growth with an aim of buyout
”leading supplier in Europe”
”from 200 000 users to 1,4 million”
“Multiplying our turnover.. ..”
Very high
Seeking rapid exponential
growth, global market
leadership
“more than 100 million downloads”
”we have customer already in 87 countries
and our aim is to become global leader in
[chosen market segment]…”

8. 9
Findings 2 – Why ambition levels differ between companies?
1. Target market changes everything
 Size and phase of the market
 Growth potential,
 Entry barriers (e.g. regulation),
 Network effects
2. Business model design choises
 Partners, revenue, cost structure, customer segments, channels
3. Personal characteristics and experience of entrepreneur
4. Different external stakeholders supporting growth
 Accessability of public funding vs. private funding
 Incubator and/or accelerator programmes
 Need to show growth ambition to be accepted
 Co-residence and influence of other entrepreneurs
 Guidance from coaches and stories from successful entrepreneurs
 Press and media
 People don’t want to hear about mediocrity

9. 10
Findings 3 – Growth-ambitions differ also within companies?
1. Different ambition levels between founders
 the personal characteristics, risk aversive behaviour, and perception of barriers for
growth
2. Context of presenting growth estimations
 ” you need to have at least three slide decks with different growth projections:
(pessimistic/realistic) steady growth projections for banks, middle-of-the-road estimations
for the public funding authorities, and overly positive for business angels and venture
capital organizations.”
3. Phase of the start-up innovation process?
 In early phase - entrepreneurs may be inclined to downplay their high ambitions?
Culture?
 When seeking funding / scaling aggressively - when start-up starts to get some
traction and needs media coverage and/or external funding, it may have incentives to
highlight the ambitious growth goals.
 Is it the AMBITION that changes along the way OR the way how the ambition is
PRESENTED in public?

10. 11
• Entrepreneurs’ may have different stories/numbers about growth ambitions that are
targeted to different audiences
• It is neither realistic nor beneficial to expect same level of growth ambition from start-
ups that aim to different types of markets by executing business models that are very
different from the scalability perspective.
Practical Implications

11. 12
 Institutional approach on entrepreneurship & innovation management
 Growth ambition shouldn’t be seen as a single measurement, but more complex
socially constructed concept
 Entrepreneurs’ social contexts (culture, previous work, networks,..) can be seen as
an institutional template that defines:
 How high you should aim
 How you should express your growth-ambitions
 Temporal differences
 Strategic support actions
 different types of start-up companies have different needs and therefore the support
provided to those start-ups should be different.
 worth considering whether all kinds of start-ups need equal support or should
support be mainly targeted, for example, to high-growth-ambition companies
Theoretical and political contribution

12. QUESTIONS?

13. THANK YOU!
Arto Wallin
Senior scientist, project manager
Technical Research Centre of Finland VTT
Arto.wallin@vtt.fi