Seven of Sweden’s hottest startups have at least one founder with a foreign background. Diversity can be an important part of the success formula.
Most startup founders dream about world domination, at least within their own industry. Among those who have managed it seems as if first and second generation Swedes are considerably overrepresented. Read more about that here.
We asked the following questions to fourteen of Sweden’s hottest startups: “Are any of your founders born abroad or do any of them have a parent born abroad?”
Half of the companies said that it is the case. Among them were companies such as Truecaller or King, which recently were sold to Activision Blizzard for $5.9 billion. The result might not be very surprising. According to Craig Mitchell, postgraduate at Sten K. Johnson Center for Entrepreneurship at Lunds University, immigrants are in general more prone to start companies compared to native Swedes.
“It can often be the case that people with a foreign background do not feel they will get a job matching their competence, or that they are being discriminated in working life for different reasons. This triggers many to start their own companies”, he says.
The majority of company founders we have asked are second generations Swedes, however. Meaning that at least one parent was born abroad. He points out that second generation Swedes also are more prone than most to start a company. They also tend to be more successful than their parents.
“They often have as much human capital compared to other Swedes which means they are resourceful people. At the same time, they have met entrepreneurship early in their life through their parents and perhaps view it as a natural path to embark on. At least to a greater extent than those who have no self-employed parents”, Craig Mitchell says.
Breakit has previously written about Jonathan Beans master’s thesis about start-ups where he concludes that a diversified founder’s group can be a reason why some companies manage especially well. Craig Mitchell at Lunds University paints a similar image.
“I absolutely believe that it can be important for a company aiming to grow fast. It can increase creativity if you have people with varying life experiences and cultures. Also, an international group of people provide a clearer global view already from the start on top of that”, Craig Mitchell says.
He is also clear about not believing in a special community being more innovative and entrepreneurial than any other.
“Previous research in USA has often measured communities and nationalities against one another, where it was found that Chinese immigrants for instance were very successful while African-Americans had a tougher time coming through. But that more due to differences in availability of role models and a resourceful community with a strong safety-net”, he says.
He further says that the community and social environment often can be connected to your culture since it often is built on kinship but the culture in itself is not more or less suitable for business enterprise.
But everything is not milk and honey for business owners with a foreign background. One of the greatest differences between Swedish business owners and their immigrant counterparts is the resistance they face along the way.
“It is tough being an entrepreneur for everyone but immigrants and people with non-Swedish ethnicity have an even tougher time. Basically everyone I have talked to have faced some sort of discrimination or racism”, Craig Mitchell says.
The fact that there are many role models with a foreign background in the startup world might possibly level the difficulties you face on the way there. Or at least encourage more people who otherwise might not have dared to start their own company.
“People in general aspire to be like people they respect and can relate to. So it’s really important to have people with similar experiences as yourself as role models. That is why special mentor networks for women exists, for instance”, he says.
We should not draw any grand conclusions from the numbers we have assembled since we have only spoken with fourteen companies. But the numbers correlate with Craig Mitchell’s view regarding the startup scene in Sweden. It’s more diverse than the rest of the country’s business landscape.
“I do not have any numbers or research on this but this is my experience from teaching. At the master’s program here, everyone is involved in starting up companies and we can see that founder groups with great diversity manage very well. I am absolutely convinced that many startups in Sweden have understood this, he says.