Four years in a row Estonian startup ecosystem has held annual fireside chats in order to vibe together and hear what is happening in the startup, venture capital and angel investment world right now. On January 18th five core organizations’ representatives gave some insight into what happened in 2023 and what to wait in 2024. EstBAN also launched a new an angel investment ecosystem project called Connect2Scale.
EstVCA, EstBAN, Invest Estonia, Startup Estonia and Estonian Founders Society all define the game from their perspective. Read below what Mait Sooaru from EstBAN, Kaidi Ruusalepp from the Estonian Founders Society, Joonas Vänto from Invest Estonia and Margus Uudam from EstVCA had to say about 2023 and 2024. The discussion was moderated by Eve Peeterson from Startup Estonia.
Times are turbulent, but there’s no big drama
Mait Sooaru, a business angel and board member of EstBAN pointed out that even though investors like certainty and predictability – it’s not there at the moment. “The economy has always been and will be cyclical. So I would say it’s sort of a clean up phase we’re going through – the weakest ones will not survive,” Sooaru said.
When Eve Peeterson asked the audience who’s planning investments this year – at least half of the hands of 150-people crowd were up in the air. So it really might be a great time to look around and pick your investments. Kaidi Ruusalepp confirmed that as a female founder, times are great! Estonia is doing OK and 2023 showed as good annual results as 2022.
Joonas Vänto pointed to media and said their headlines are more dramatic than the actual situation – from the insiders’ perspective, there’s no such drama. “Investors are thinking years ahead and do not let headlines or downturn shake them,” he said. Adding that it’s a common knowledge that if the economy goes down, it goes up again at some point. Vänto mentioned that last year Invest Estonia had 167 investors visiting – and he senses that there is enough interest to invest into Estonia from abroad.
Margus Uudam confirmed the latter saying there are always people who get to experience huge loss, but then there is also balance – when some have gone to extremes and experience a bad “hangover” now, there’s always some people who remain sober and look into their (bright) future no matter what.
Call to action: we need more crazy founders!
Kaidi Ruusalepp made a call to action for all the possible founder types out there saying that we really need new super founders who squeeze oil out of stone. “A great founder is key! How do we get more founders? That’s our next big challenge,” she said and explained that after tiger leap and establishing a strong startup sector, we are now on the doorstep of a Founder Era.
Except the fact that we have our own future founders going to school now and already working at the existing companies, the panel agreed that Estonia has many advantages why foreign founders should come here too. We got speed of setting up a business, we get things done rather fast in general and you can easily run a global company from here. The ecosystem is small, everyone and everything is close.
We need to normalize failing
Margus Uudam pointed out that even though we have many startups, some of them are waiting too long without any growth. “They should fail faster and start something new,” Uudam kicked off the new discussion. Mait Sooaru and Kaidi Ruusalepp agreed that we should definitely learn from US – to fail fast. “There’s no shortage of good ideas. Execution is key! If an old idea doesn’t die, but doesn’t fly either, get rid of it and start something new!”, Sooaru encouraged. Ruusalepp added that failing is part of the business, and we should foster it when needed.
Mait Sooaru brought in another interesting point about the entrepreneurship in general. He said that we still lack the positive public opinion about entrepreneurship. “Isn’t it clear that entrepreneurs create new jobs, new companies and public opinion should support all kinds of entrepreneurs?,” was his thesis.
Opportunities and threats go hand in hand – what about AI?
Besides that Estonia still needs more ICT field employees and high scale engineers, we need more scientists who set up a company. The panel discussed how to set them a proper support system in order to succeed with their scientific discoveries turning into business ideas.
Last but not least – many interesting thoughts and questions on AI were shared, such as:
- will AI distroy all or will AI save the world?
- Are we living in a bubble that’s going to explode and if yes, what happens then?
- How do we train the maschines? If they are only trained by the internet – well internet consists of lots of false information, how do we go past that?
Joonas Vänto summed it up saying that we’re just sniffing AI. “It’s a new era where current AI helps with productivity, but what comes next? The question remains – are we running into the right direction at all?
What happens in 2024?
Margus Uudam: “We will see who is in, who is out. Quite many become normal companies, break even, and some will run out.”
Kaidi Ruusalepp said even though it might remain just a thought, but some layoffs should come – some founders will have to start new businesses, there’s no time or money to prolong what’s not working by now. “We have massive challenges in the world. I hope these new founders will use these new challenges,”.
Kaidi added that she’d put her money behind an Estonian superfounder. Markus Villig and Taavet Hinrikus were mentioned as role models for superfounders.
Healthtech, defence and energy sectors were also mentioned as good investment perspectives. Mait Sooaru ended with a note that the times will remain turbulent, but the next growth will come!