THINGS is a coworking place with a hardware, B2B and industrial focus. Founded in 2015, it is a space where startups and industry meet. THINGS Wall of Fame award is presented each year to an exceptional individual who has built a successful business empire based on pioneering innovative hardware technology.
We had the pleasure of meeting three of our hardware heroes during a fireside chat in October 2018 at THINGS KTH located coworking place! Martin Gren, co-founder of Axis Communication, recipient of the award in 2015, was there in spirit but could not join us this time.
John Elvesjö, Nicolas Hassbjer and Stina Ehrensvärd are recipients of the award in 2016, 2017 and 2018 respectively and all three are inspirational role models within the startup community in Sweden. Their shared breadth and depth of experience set the fireside chat up to be a riveting and insightful evening of different perspectives.
- Stina founded Yubico in 2007 and is still very hands-on operational with building the business.
- John founded Tobii in 2001 and has just given up his executive role to be a member of the board so he can focus on investing in venture capital.
- Nicolas founded HMS founded company in 1988 and after 25 years (21 as CEO/ 4 on the board) he has for some years pursued a non-executive role in currently 8 companies.
A summary of the evening’s discussion is outlined, followed by a detailed article of the fireside chat, which took place with an audience was drawn from our extended community and represented a cross section of Swedish business, industry and government.
1. Startup journey:
“Serendipity moments that just changes everything”.
- Securing the first customers
- Product development
- Hiring hardware talent
2. Retrospective learnings:
“There are several critical occasions where HMS could have failed”.
- Becoming over dependent on a single demanding customer
- Having the wrong owner set up
- Managing investor expectations
3. Future trends:
“I am often struck by how dumb machines are”.
- Internet and device reliability and security
- IoT interoperability
- Intelligent machines concept
- Delivering value to a more demanding user
1. Startup journey:
THINGS is a meeting place for startups and corporates and we try to help our members to secure customers. Has serendipity or strategy a bigger role to play in securing your first customers?
“Serendipity moments that just changes everything”.
Stina described meeting a journalist at a San Francisco trade show, having no customers, partners or investors - a serendipity moment that would lead to a podcast about the “coolest authentication hardware ever!” and set in to motion Yubico’s first customers. A chance encounter perhaps, but it can be argued that Stina had created that chance, in putting herself in the right place at the right time. It was after all, part of Stina’s first business plan to be in California and to make her connections directly in Silicon Valley. Executing it took drive and courage, in her own words, “sometimes you give up or become angry and bitter, but you find that 6th gear and do whatever it takes… You are forced to be creative and focus on who (customer) has the best leverage”.
For Nicolas and HMS, it was the combination of servicing a demanding customer and market access to new potential customers which lead to Yaskawa Robotics: HMS’ biggest customer for over 10 years and at the time the “Google of Robotics”. Similar to Stina securing Google as part of her first business plan, Nicolas realized also the potential volumes for HMS were not 10K, but 100K to each customer after a business trip to Japan: securing the biggest player in a marketplace means you can sell to all the others.
A self-professed tech nerd, John founded Tobii on the back love for the technology and set about a very analytic approach to writing the first business plan by mapping out an adoption curve and analyzing: what customers will be more demanding, who could use and what value, who will pay most, be most forgiving of flaws, limited features set etc. The resultant first business plan was pulled out every year and the adoption curve scrutinized as he first saw it.
THINGS is the leading hardware hub in Sweden. What were the challenges of scaling a hardware product, which is notoriously difficult?
“Difficult in that it’s not just pressing a button and it’s a million users. We actually need to build product, components and sourcing. Months.”
Nicolas illustrated perfectly the virtues of a demanding customer and scaling as it became apparent that HMS needed to develop its own competence in production and quality in order to fulfill the toughest demands. During a 10-year period, HMS grew 50% year per year. Scaling that production is no easy task and without their own production competence, they would not have been able to outsource the volumes to the right subcontractors.
Despite the challenges and maybe because of them, Nicolas built HMS to be a hugely successful business and describes with joy the building of other companies and in particular, hitting that sweet spot of 25-50m SEK revenue when the company is really starting to expand rapidly and internationally. He even jokingly admits that the board room is never as fun as in the management team when a company takes off!
THINGS members range from early stage/seed to A round startups. What is the importance and time frame of product development, continued research and expanded product offering?
“You can end up developing an electronic system forever, so it is important to sell”.
Nicolas shared his philosophy on a 5-year product development cycle. To listen to customers and fine tune the product. The process needs to be repeated in cycles, otherwise you can end up developing an electronic system forever, so it is important to sell and when you have revenues then you can do the next step of bigger innovation.
Stina agreed in terms of needing to focus on what you have, otherwise you have nothing. It’s about finding balance between finessing an existing product and developing a new innovation.
THINGS members and alumni consist of 26 different nationalities. Where is the hardware talent in Sweden and why is it so difficult to find?
“Finding good hardware talent is difficult”
John expands further that hardware is hard and laborious and so is not as sexy compared to software. It involves set up, manufacturing, production and logistics and is the reason why homegrown talent has not been growing. So, he advises that if you are really growing, consider importing talent, hire people and have them more here. It’s possible as Stockholm sufficiently attractive on the startup scene with a fantastic ecosystem thanks to good incubators, startups and unicorns.
Tobii’s Stockholm office consists of 48 nationalities and the R&D team of 350 people is made up of 30 of those nationalities. Stina quipped in support that 60% of staff in Yubico’s Stockholm office is non-Swedish and that it is actually an asset when recruiting good international people.
Nicolas too could not over emphasise the importance of real hardware wizards and pointed out that it is ultimately the hardware engineers who determines the cost of the product. So, the whole future profitability comes down to their ability and how innovative they can be to press down cost. Critically it can also determine the future success of the company to reach the really high-volume applications: “Many startups make a great product, with outstanding software, but they fail because is too expensive and there are no margins for the whole chain.”
2. Retrospective learnings:
THINGS members are keen for concrete tips on how to avoid the pitfalls. Is there a specific past failure that comes to mind and what was the lesson learnt?
“There are several critical occasions where HMS could have failed, but some could be turned into opportunities”.
Nicolas reiterated the importance of having a big demanding customer and all three panelists agreed that revenues from a demanding customer is more important than the amount of venture capital. He did caution however against becoming too dependent that it is critical to search for more customers and sees this problem with companies when they scale as an investor. He cited an example in 1993 where the combination of high interest rates and a customer with a thin balance sheet went bankrupt, almost taking HMS with them.
For John, there were definitely a few moments when everything could have folded for Tobii, but the example which came to mind and which John coaches friends and founders is his experience of having the wrong owner set in a previous company in 2001 - 2002. It was a tough time to be caught with the wrong owners and wrong agreements and to not be able to get out of the situation. The company was eventually sold and the lessons learnt were taken to the next company.
Finally, all three panelists agreed on the importance of managing investor expectations. They should be on the same side, have an aligned agenda and share the same mission and ambition. Of course, investors should challenge and have requirements, however promising more than you are comfortable with and then failing on them can lead to an unhealthy spiral.
3. Future trends:
THINGS hosts a ‘Get On Top Of’ event series currently focused in four areas: LPWAN, Machine Learning, Robotics & Low Power Systems, important technologies that are shaping the future. What current trends will have a significance in the long term?
“A free, open and secure internet will play a vital role in the protection of democracy in modern society”.
This realization came with Yubico’s work with Freedom of the Press Foundation in securing communications and to protect the confidentiality and integrity of information sources. Further collaborations with payment providers, IoT, encryption means Yubico’s code is getting in to the foundation for a future free, open and secure internet for everyone. To be safe, secure and potentially untrackable means the technology can also potentially be misused. So, it will be interesting to see how the area develops and what role Yubico will play.
IoT mega trend: “There is plenty of time to start new IoT companies, the projection of 50 bn devices by 2020 will not develop so quickly”.
Nicolas broke down the IoT megatrend further:
- Concern about interoperability. Closed systems they can’t interact with other systems. No real solutions so interesting areas.
- Many IoT solutions do not currently provide enough value to customer. Where they provide real value to the customer, you get almost addicted to that.
- Device reliability and security. More critical systems being connected and in 5-10 years it will be devices that talk to each other so reliability of systems an issue and security.
Intelligent machines concept: “I am often struck by how dumb machines are”.
Identified by John as a trend that has barely started, is the need of machines to be more intelligent: by knowing unobtrusively and using at a pragmatic level the fundamental answers to who you are, where you are, what you are doing and what you will like to do. This will be the basis of product design going forward and sensors will play a huge role. Like Nicolas, John agrees that there is a gap for new companies with a more demanding user in mind, with the potential to sweep big entrenched companies to the wayside.
Stina Ehrensvärd and her husband started Yubico in 2007 with a vision to make internet security both user-friendly and secure. Yubico has since become a new standard for secure computer log in to computers, mobiles, private networks, and services. Today Yubico has an impressive customer list of the biggest international digital corporates with 120 employees and €50 million revenue forecast for 2018. With a strong vision, healthy stubbornness, innovative technology, and complementary founder skills, Yubico has become the true world leader in user-friendly and secure internet login technology.
Nicolas Hassbjer founded HMS in 1988 as a result of his student project at Halmstad University, with a passion for electronics and embedded software, HMS was an early pioneer of the Internet of Things and is today a world leader in industrial communication. HMS has over the years achieved rapid annual growth to over1 Billion SEK in revenue and 500 employees. With professional management, continuous innovation, and a successful IPO, HMS has developed into a success story within the Internet of things area.
John Elvesjö is an innovator and entrepreneur with a passion for the core technologies of sensors, optics, digital design, and algorithms. Tobii, one of the companies he has founded, is today the global leader in eye tracking. Tobii has pioneered research in many fields and enables communication for tens of thousands of people with special needs. The Tobii group has some 1,100 employees and has achieved rapid annual growth since it was founded in 2001. With professional management, continuous innovation, and a successful IPO, Tobii has developed into a success story.
Ingrid Cloud is now the commercial name for the engineering simulation tool developed by researches that are based here at Things Stockholm. Former Adaptive Simulation, is one of many examples that growth usually comes together with rebranding.
“The process of naming was, at first, intuitive. We developed an adaptive algorithm for flow simulations, so Adaptive Simulations sounded good. We started calling it that way and suddenly it felt familiar. But when the business is growing and getting to market, brand is an important subject and the first concept to review is precisely the name. Was it really a good one?”, that’s how Sebastian Desand, CEO and Founder, describes the call to the need of rebranding.
The story is very common among new businesses and startups. Beyond checking social context, pronunciation issues and intrinsic references, choosing a name involves also technical approaches: is the name taken on social media? Is the domain available and affordable? Those are just a few items to check.
After having the home work done, the startup founded in 2014 finally launched Ingrid Cloud for commercial use. “‘It was a subtle way to have a Swedish signature in the product – referring to the notorious actress Ingrid Bergman. Also, the fact that it’s an actual female name brings the sophistication and personality we were looking for a product that makes a very complex problem, easy”, concludes the CEO.
Ignite Sweden can already showcase several successful collaborations such as Alfa Laval and Ekkono. A recent addition to it's successes is an AI-powered energy case between Stockholm Exergi (formerly Fortum Värme) and Sentian.ai.
In conjunction with the Nordic Clean Energy Week, Ignite Sweden brought together 13 corporates and 51 startups at the MINC incubator in Malmö last week. It also coincided with reaching 1,000+ tailored match-makings with a total of 184 startups and 48 corporates.
One of the Ignite meetings is between the artificial intelligence startup Sentian.ai and Stockholm Exergi. They first met in Malmö late in September 2017, during a previous Ignite match-making event. Less than a year since their first meeting, they are running a pilot together.
- We hit it off from day one. It was the two halves of one solution coming together, our technology and their needs, says Martin Rugfelt, CEO and founder of Sentian.ai.
Sentian.ai helps large companies transforming their businesses to become algorithmically driven through AI and machine learning. The clean-energy and heating company Stockholm Exergi caught their interest already last year.
– We have been already carrying out pilots in our facilities around to how we operate and maintain the power plants. Collaboration with Sentian.ai have been valuable for us to understand new applications and the potential in digitalizing our processes, says Gunnar Borgström, Head of Digital concepts at Stockholm Exergi.
Sentian.ai and Stockholm Exergi are collaborating on a learning anomaly detecting solution for distributed heating plants, meaning identifying when something is not right in the power plants.
– From a startup point of view Stockholm Exergi is an ideal partner. They have the will, the means and the preconditions for a successful collaboration - says Martin Rugfelt.
– It has been extremely beneficial for us to work with startups, in this case Sentian.ai, as we can learn a lot, both form their expertise in the area but also about how to approach challenges in new ways, says Gunnar Borgström.
Stockholm Exergiand Sentian is just one of 1000 tailored meetings that Ignite Sweden have arranged since their inception. Half of those meetings has resulted in a continued dialogue, with 18 projects commercialised to date.
About Ignite Sweden
To increase the pace of innovation and economic growth, it's necessary to establish tighter bonds between Sweden’s great startups and large corporates. Ignite Sweden is a national initiative and will run until January 2020. The overall aim for the project is to help startups to find their first large customers. The project is led by THINGS, STING, LEAD, MINC, UMINOVA and SISP. Ignite Sweden is co-funded by Vinnova and supported by the Swedish Energy Agency.
What is the concept behind Get On Top Of (GOTO)?
GOTO was established to help Swedish industry prosper. It is a collaborative learning forum bringing together the best minds from our extended community to collectively anticipate, inspire, drive and engage in what will happen next.
What happens during an after-work event?
The format is high energy, 15 min knowledge and insight sharing presentations from 5-6 speakers, followed by a panel discussion, if appropriate. All presenting companies also have a stand-up table to gather interested attendees for further discussion.
What topics are covered and how do you choose them?
We identify key technologies “around the corner” to get relevant people on top of. Like in surfing, timing is key, in order not to start ride a wave too early or to miss it. We started with LPWAN in 2017, added Machine Learning late 2017 and had our first Robotics a couple of weeks ago. The theories, vision and ideas may not be ‘new' but, driven by the shift in context and how it is applied right now, they have become a catalyst for a lot of development.
How often does it happen?
Frequency is driven by the volume of interested corporates and individuals. For example, we have had 8x LPWAN events with a total of 700 attendees and 4x Machine Learning with some 300 attendees. Demand and engagement remains high and we are currently planning our 2018 autumn/ winter events program, so watch this space! All GOTO events are open and announced on our web.
Which startups and corporates have participated in the past?
At THINGS we know the subject, industry and key players, so we ensure that the mix of attendees at a GOTO event are relevant, interesting and inspiring. Our speakers are people who have been working hands on in the field we cover, since shared experience and insight is far more interesting and inspiring than theories and plans. Furthermore, they have the foresight and open-mindedness to share and be a part of a community. The quality of the companies attending our GOTO events really speaks for themselves. Attendees from our latest GOTO Machine Learning event (03 May 2018):
Accenture, Anticimex, Ashmore, Assa, ASSA ABLOY, Atlas Copco, Avocado, Balfe Arbman Communications, Berghs School of Communication, Berotec, Bonnier News, Cabon, Capgem, Centigo IOT Hub, CIM Coach, Combient, Crosser, Daresay, DEKRA, Doberman, Electrolux, Ericsson, expandtalk, FLIR, FMV, Forest Fund, Handelshögskolan, House Be/E14 Invest, Imagimob, Infracontrol, KTH, Masseengineering, Mobit Consulting, Nackademin, Nordic Guarantee, Northstream, Optonova Sweden, Orange Business Services, Scania, Skanska, Sopra Steria, Studio Foga, SUNMICO, TCO Development, Tiandi, Tritech, TRNPK Sweden, Univrses, Vattenfall, Verisure, Volumental and WSI.
Why is it important for the startups and industry?
Much like the onset of the internet, the digital transformation will have a huge impact on people and it is equally as difficult to figure out what will happen. Success will depend on information, inspiration and relations. So, it is vital to prepare now, to identify what is common and to do this together as a community in order to be a sustainable force in the long term.
How do I become involved/ contribute?
THINGS’ Wall of Fame is an annual award presented in recognition of an exceptional individual who has built a successful business empire based on pioneering innovative technology that has come to define the world we live in. Thereby acting as an inspirational role model for the startup community in Sweden.
THINGS’ 2018 Wall of Fame is awarded to Stina Ehrensvärd, CEO and co-founder of Yubico. Pär Hedberg, THINGS’ chairman of the board is convinced that Yubico will become the next Swedish unicorn and here is why:
“With a vision to make internet security both user friendly and secure, Stina Ehrensvärd and her husband started Yubico in 2007. Yubico have since become a new standard for secure computer login to computers, mobiles, private networks and services. Today Yubico have an impressive customer list of the biggest international digital corporates with 120 employees and €50 million revenue forecast for 2018 . With a strong vision, healthy stubbornness, innovative technology and complementary founder skills, Yubico have become the true world leader in user friendly and secure internet login technology.”
Yubico’s representative Annie Fornelius received the award on behalf of Stina at THINGS’ 3-year anniversary event which took place on 22nd March 2018 with 300+ tech startup and industry guests. Stina joined us in spirit with a video message from her Silicon Valley offices, outlining Yubico’s entrepreneurial journey and revealed that the most rewarding aspect of building a successful business comes down to great teamwork. Stina recounted also, how Yubico distilled their vision of making the internet safer for everyone in a half page business plan and targeted only a handful of the really big internet companies on America’s west coast. Success and verification with Google in 2012 meant other services soon followed and they were able to scale their technology to millions of users.
Previous THINGS’ Hall of Fame recipients:
2017: Nicolas Hassbjer founder of HMS
Nicolas Hassbjer founded HMS in 1988 as a result of a student project at Halmstad Högskola, with a passion for electronics and embedded software, HMS was an early pioneer of Internet of Things and is today a world leader in industrial communication. HMS have over the years achieved rapid annual growth and closed 2016 with close to 1 Billion SEK in revenue and almost 500 employees. With professional management, continuous innovation and a successful IPO, HMS have developed into a success story within the Internet of things area.
2016: John Elvesjö of Tobii Technology
John is an innovator and entrepreneur with a passion for the core technologies of sensors, optics, digital design and algorithms. Tobii, one of the companies he has founded, is today the global leader in eye tracking. Tobii has pioneered research in many fields and enables communication for tens of thousands of people with special needs. The Group has some 600 employees and has achieved rapid annual growth since it was founded in 2001. With professional management, continuous innovation and a successful IPO, Tobii have developed into a success story
2015: Martin Gren, co-founder of Axis Communications
Axis was the first company in the world to launch a network camera in 1996, initiating the shift from analog to digital technology. Today Axis is the global market leader in network video, driving the industry by continually launching innovative network products based on an open platform - delivering high value to customers through a global partner network. Solid management, continuous innovation and a world-class indirect sales organisation has made this company started by students in Lund a true success story.
THINGS Stockholm’s Executive Summit is a first time gathering of our Enterprise Circle corporate partners and startup members and friends at our co-working space which is located on the KTH campus. 33 corporates and 15 startups participated on a half day knowledge and experience exchange consisting of: 1. Collaborative case studies between corporates and startups. 2. 10x 5 minutes speed pitches from THINGS members’ and friends’ startups and 3. Insights and talks from corporates and corporate ventures. Our common interest is a commitment to innovation and technologies, which are defining the future.
Collaborations between startups and corporates make perfect sense.
A study by Ignite Sweden of 600 business meetings showed that the top 2 priorities when collaborating are, for corporations: 1. Explore new technologies. 2. Access to entrepreneurial talent and energy and for startups: 1. Developing strategic partnerships. 2. Accessing markets/ developing channels.
“Collaborations are critically powerful” (Enterprise Circle corporate partner)
Frank and insightful discussion ensued with world class collaborative case studies presented to a 60+ strong engaged audience.
- Ekkono x Alfa Laval (Jon Lindén, CEO Ekkono & Jan Ackalin, Head of Automation, Alfa Laval.
- Springworks x Telia Company (Thomas Ericson, Deputy CEO, Springworks & Jens-Peter Meesenburg, Director of Industry verticals, Global M2M/ IoT, Division X Telia Company).
- Imagimob x Autoliv (Anders Hardebring, CEO Imagimob).
- MTEK x Nokia (Mattias Andersson, CEO, MTEK & Grant Marshall, VP Supply Networks & Engineering/ Global Operations, Nokia).
- H&D Wireless x Scania (Pär Bergsten, CEO ,H&D Wireless).
A central theme was the importance of trust and passion in order to jointly exploit the huge opportunities for innovation and how to balance the challenges of aligning two different cultures. This was underscored by Ulf Södergren, CTO, Assa Abloy, where he shared his serious commitment to startup collaborations in designing and implementing a rigorous collaboration strategy and process.
10x 5 min speed pitches by THINGS members and friends startups were peppered throughout the half day executive summit which was rounded up by Malin Carlström, Sr VP Northern Europe, ABB Technology Venture and Magnus Lundin, Head of Nordics and Baltics, Siemens next47. The corporate venture giants reinforced the importance and need for disruption and innovation. We can’t agree more.
“Our partnership with 3DVerkstan enables our members to experiment with new designs and faster iterations, which in turn increases throughput in their product development.”, says Linda Krondahl, CEO at THINGS. “Our members are startups; they need to be quick and adaptive, building on the strength of being a small organisation. Having 24*7 access to good prototyping tools and solutions is key in making that happen.”
“We are happy to deliver not only 3D printing technology, but also continuous training to the members of THINGS so that they can iterate prototypes quickly and bring out their innovations quicker to the marketplace.”, says Daniel Ljungstig, CEO at 3DVerkstan.
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Utvecklingen inom Internet of Things går i rasande takt. Första avsnittet av IoT-podden ger en övergripande bild av utvecklingen och trenderna.
Programledarna Paulina Modlitba Söderlund och Fredrik Karlsson gästas av Linda Krondahl, vd och medgrundare på Things, en hubb för hårdvaru-startups på KTH i Stockholm. Ur innehållet: Var i organisationen behövs kompetens inom IoT? Hur startar jag ett IoT-projekt? Nedslag på World Mobile Congress och Industrial Internet of Things. Drönare med laserscanner räddar liv i gruvor. Talande dockor som kan hackas. Och det övergripande frågan: Hur skapar IoT värde?
Lyssna på avsnitt 1, läs artikeln, IoT-poddens facebook
Swedish Mobile awards is a 19 years old institution on the Swedish Tech Scene and several of the Swedish unicorns once were awarded there. The Award ceremony is part of Connected Business Days, which for the first time taking place in spectacular Studio in Malmö away from Stockholm.
It amazing to see four of the members from THINGS are nominated for the awards this year which not only underlines the importance of hardware in IoT but also indicates the cretical role THINGS plays as the hardware hub for startup in Stockholm.
Neuelabs is one of the nominees for the IoT Hardware Company Award, where ideas brought to life from prototype to production in fashion tech and wearables. Inkonova drones on the other hand have the ultimate drone for mine and tunnel operations. Who is also nominated for the IoT Hardware Company Award 2017.
Light Flex and Racefox share the nomination for Innovation of the year Award at the Swedish Mobile awards. Light Flex works with printed active light incorporated in clothing. Racefox is chosen as one of the nominee for their work with real time motion analysis through sensor for skiers.
"We are partners to Connected Business Days in Malmö and I will be very proud to see our members entering the stage on Thursday”, says Linda Krondahl, CEO of THINGS. “We are celebrating our 2 year anniversary at THINGS March 30 and having four nominees at the Swedish Mobile Awards already feels absolutely great”, concludes Mrs Krondahl.
Start-up evangelist and THINGS co-founder - Magnus Melander was the keynote speaker at the 2016 Impact Awards. His interview with the ABS South Australia- Adelaide is on the following link: