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Sunday, October 28, 2012

Presentation Notes - Case Samcom, Crowd-funding, Commercializing an Idea

I somehow managed to participate in three great business related presentations last Thursday. The first one was about how to commercialize your idea, the second one was an overview of a growth company and the third one was about crowd-funding. In this post I'll focus primarily on the first one since I think you might benefit most from it. I'll share a couple of tidbits about the latter two with you first, though.

Case Samcom

Samcom, part of Samlink these days, is one of those great growth stories of the Jyväskylä region. In mere six years the company grew from zero to six million euros in revenue. They focus on providing IT solutions (mainly Java and MS tech) to very specific markets. This focus is a part of their success. They  decided to target certain markets, like energy industry, in particular.

Markets like energy industry are interesting because it can be really tough to get in but once you do everyone wants to do business with you. Banking industry was mentioned as a counter-example. These guys really want to hold on to their secrets and rather work exclusively just with you.

The success of Samcom was built on sales. The requirements made by concrete sales resulted in solid growth and meant new personnel had to be brought on board. In those six years the company grew from one person to well over fifty.

The growth was not without its problems. One important lesson here to keep in mind is that as a CEO you cannot micromanage everything as your company grows. You will have to learn to delegate. You should make the company able to run without yourself.

The structure of the company has to evolve as the company grows. After you reach a certain limit (say 30) you might want to consider employing a HR person for instance. Even though one does not provide direct value to the company, you will benefit as it allows you to share the responsibility.

Overall I enjoyed the case study. I am not entirely sure if it is possible to achieve similar explosive growth in the current economic climate. There were definitely some golden tidbits there, though.

Fresh Effect - Crowd-funding

Fresh Effect is one of those up and coming companies from Jyväskylä. Their idea is actually quite simple. They build greenwalls. You might ask what is a greenwall then. Well, simplified it's just a container filled with plants. You'll put that somewhere in your building and it will keep the air clean.

Even though this sounds very simple, there's more to it. Fresh Effect utilizes technology discovered by Nasa. As you might know those guys want to go back to the Moon at some point (no idea when). Since it is expensive to transfer conventional air purifiers and whatnot there, they had to come up with something else. Plants were the natural alternative. As a result they managed to optimize their growth and purifying in certain ways. This is what Fresh Effect builds upon.

Fresh Effect has just one problem. It is very expensive to make their production scale due to the cost of machinery needed by a process that would allow them to produce their solutions in a more effective manner. They've tried to attain funding from various sources. Unfortunately there is no easy way for them to reach the amount they need, at least in Finland that is. They can still perform their business in a small scale (ie. business to business) but consumer market is out of their reach.

This is where crowd-funding à la Kickstarter comes in. Kickstarter is one of those services that really has made it into the public consciousness. It simply allows consumers to vote with their money in a very concrete way. Using it various enterprises have created products unimaginable using conventional funding models.

Fresh Effect wishes to capitalize on this fact. They will launch a campaign aimed directly at producing a consumer version of their product. I won't go into the details but let's say it's going to be somewhat interesting to see how it works out. They have several challenges (ie. the size of the product) to overcome but I think they might fare surprisingly well.

How to Commercialize an Idea

This presentation, given by Tommi Järvinen of Fondon, was a really intriguing one. It was all about how to connect the dots, or rather how to connect your idea with a concrete customer need and make it work in a commercial way. Even though your idea might be great it might not be sellable.

I think one of the core points of the presentation was that marketing is all about stories. You wish to build a story your customer can believe in. Consider Joulukka. It's a place where the Santa lives (at least for some). They started the whole business by coming up with a believable story and actually getting enough concrete commitments from the customers to allow them raise the funds to make the story real. Chew on that for a while. It is easier to get funding if you can prove there is demand. Money isn't the ends, it's the means.

Another important point Tommi made had to do with figuring out your target market. You actually might have a few. It is better to focus only on one in the beginning. He gave a nice example of how not to do this. There was this company that produced hermetically sealed, airtight containers. They decided to market the same product both to hospitals and mining companies. So did it work out?

As it happens, it did not. The hospitals thought it cannot simply work for them since those mining use them too and vice versa. Instead what they should've done was to segment the product separately. Give a rugged version for those mining guys and hospital green version for hospitals.

He also mentioned that even though you might have multiple target markets and you have identified the most valuable one, you might want to go after some other market first. This is just to make sure your product is ready for that one. You can afford to make mistakes and iterate with the less important ones. You had better not screw it up with your primary market if you can avoid it.

There was also some talk about conflicting views between you, the product developer, and the customer (one who pays). What you will want to do is to make these views match as well as possible. You will want to understand the pains of your customer. Better yet instead of offering a ready-made product, offer a co-creation project. Develop the product in direct collaboration with the customer. Eventually you will end up with something that others will find useful too!

The only way to scale is to create something that's actually useful at first and provides some really concrete value that is worth paying money for. That is the measure of a successful business. You might have users but as long as they won't pay and don't become customers, you'll starve.

One final point I just have to discuss a little bit about had to do with speed. You might have the right idea. Unfortunately there is only a limited amount of time in which to monetize on it. This is particularly true in the world of today where everything moves faster and faster each day. You do not have to create anything that is perfect. Just make sure it is good enough.

This is actually something we have experienced with It's really far from perfect. Gladly the users have given us plenty of feedback to help us guide the boat to the right direction. Given it is more of a hobby project we really don't fret about monetizing on it. At this point it's more about providing the community a valuable service that will hopefully provide us good karma later on.


The more I get exposure to these kind of talks and concepts such as lean startup, the more confident I get about the way one should run a startup business. There are definitely a lot of things you should be aware of. It is not just about the technology. It's about how you apply it and where. Understanding who your customer is the most important responsibility you have as an entrepreneur.