Growing a Startup Scene in Iceland

Is it possible to grow a startup scene in a country with a population of just 320,000 that suffered one of the biggest economic crises the world has ever seen? The answer is a resounding yes.
Startup Iceland


Iceland has produced some successful startups over recent years. The most notable was Clara, acquired by Silicon Valley’s Jive Software for $9m, while QuizUp from Plain Vanilla has grown to become the world’s biggest trivia game.

Following the eyebrow-raising news that three new VC funds opened in Iceland in one week with $80 million to invest (Arctic Startup), I jumped onto Skype with Bala Kamallakharan, founder of Startup Iceland, to find out the story.

Update: We are delighted to announce Bala is joining us in Trondheim next month as a judge for the Technoport 2015 Pitching Competition.


From India to Iceland, twice!

I’m originally from India and now live in Iceland. I started my professional career in the US working in consulting. To cut a long story short, I moved here because my wife was Icelandic and with our new daughter, we wanted to move closer to her family.

I joined an Icelandic bank in 2006, in hindsight I was walking right into the eye of the storm! I thought it was my dream job, reporting directly to the CEO and working with strategic projects, and to an extent it was as I blossomed in the role.

I was appointed as Head of India for the bank, just before the economic crisis hit in 2008, so my first job in India was to wind everything up and move back to Iceland!

From banking to startups

Iceland was a zombie land with everything shut down, so as I was trying to figure out what I wanted to do next, I discovered the whole notion of startups. As Iceland is a small place, you ask around and get to whoever you need to get to very easily, so I met a bunch of young entrepreneurs. It surprised me how this group was looking at the world compared to what was being said in the mainstream media. There was all this rhetoric about how the world was coming to an end, but this group believed in something different.

They were optimistic about the future, being very entrepreneurial and building things. This intrigued me! I dug a little deeper and decided to help. At that time I was not an investor, but I had experience with finance, business plans and a network overseas. I helped Clara raise some money and the news got out that some crazy Indian was investing in startups!

Developing an entrepreneurial mindset

I met every entrepreneur who wanted to meet with me. In 2010 there was no interaction between the financial community and entrepreneurs, which made no sense to me. Most investors were from traditional industries such as real estate and fisheries and there was little precedence for investing in technology startups.

I founded Startup Iceland to connect relevant parties with one another, not just here in Iceland but plugging into networks in Silicon Valley and elsewhere. In order for the entrepreneurs to turn these great ideas into companies there had to be a mindset change. It’s taken years and the change is still happening, although the recent funding announcements show it’s getting serious at last.

Building a global network

We have more work to do changing mindset and the culture, to ensure we build a vibrant ecosystem that doesn’t implode like the banking system did. The only way it’s going to happen is if the community is open minded about it, shares and opens its arms to whoever wants to participate. The culture of not sharing has been a big obstacle to overcome here.

Every year we host a conference under the general theme of building out a vibrant entrepreneurial ecosystem in Iceland. It’s important for us to invite high profile guests from around the world such as Brad Feld and Om Malik to see what lessons can be applied here in Iceland, and to give local entrepreneurs the chance to build their own global networks. We limit the attendance to around 300 and all speakers participate as mentors too. Everyone who buys a ticket to the conference has the chance to get some one-on- one time with one of our big name speakers.

“What Bala is doing is a powerful example of “entrepreneurs leading their startup communities.” Don’t wait for government, or other “feeders” to take the lead. Entrepreneurs must lead” – Brad Feld, co-founder, TechStars

Living and working in Iceland

I love it here, it’s a great place to live and fantastic for the kids to grow up here. My daughter is fully integrated to the Icelandic education system, she is an Icelander now. On the business side it’s much harder to break in, and difficult to find work without speaking Icelandic even if the position doesn’t require the language.

My thanks to Bala for taking the time to introduce the Technoport crowd to Iceland’s startup scene. It’s a scene that’s never going to compete with the likes of London, Berlin or Stockholm, but that’s not the ambition. What they have achieved after such an economic disaster is nothing short of incredible and should serve as inspiration to any aspiring startup hub around the world.

Photo credit: Moyan Brenn

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