The recent acquisition of King, the developers behind Candy Crush Saga, by Activision Blizzard for $5.9 billion was the latest in a long line of high profile acquisitions of startups founded in Sweden. Swedish tech startup companies such as Skype, Spotify, and Mojang, seem to have an ability to achieve global success. What qualities allow them to do this and how does it tie into Swedish culture?
London isn’t the tech-capital of Europe. Surprised? According to Atomico, a VC firm which invests in technology startups all over the world, “on a per capita basis, Stockholm is the second most prolific tech hub globally, with 6.3 billion-dollar companies per million people (compared to [Silicon] Valley with 6.9).”
Despite having a thriving East London digital startup community, London has just three digital companies in the plus $1 billion category.
The recent acquisition of King Digital Entertainment, the makers of Candy Crush Saga, by Activision Blizzard for $5.9 billion was another in a long line of high profile acquisitions of startups founded in Sweden.
Sweden was home to the likes of Skype (bought by Microsoft for $8.5 billion in their largest ever acquisition), Spotify (who earlier this year received a monster $526 million funding round), and Minecraft creators Mojang (also subject to a major $2.5 billion Microsoft acquisition earlier this year), all of whom exist with King in a group of elite Swedish tech companies that have managed to achieve global success.
All of these brands share one incredible trait: the ability to appeal to global audiences, expand rapidly across territories, and reach new markets all across the world.
Arguably, it’s a trait that Swedish businesses have always possessed; brands such as Ikea and Volvo have managed to globalize while maintaining a unique, decidedly Swedish brand identity.
IKEA celebrate a distinct Swedish identity throughout their stores around the world.
Ikea’s unique blend of minimalist functionality, innovation, and simplicity of design have been largely admired yet little emulated, and Volvo have nurtured a reputation for safety and steadfastness, which has made them a popular brand in emerging markets such as the burgeoning middle-class in China (the auto manufacturer was brought under Chinese ownership in 2010).
For a single country in Europe to produce digital properties that rival the giants of Silicon Valley is remarkable. So what is it about Sweden that gives these brands such a global edge?
‘Just The Right Amount’
It’s worth drawing a comparison here, between Swedish tech companies, and a long succession of popular Swedish pop groups, starting with ABBA, who have also managed to export their brand well beyond Swedish borders. Sweden is in fact, the third largest exporter of pop music after the UK and U.S.
In an interview with the National in 2011 Ulf Ekberg of Ace of Base gave his thoughts on what makes Swedish music so universally accessible:
“For Sweden [melody is] number one and has always been. While the Americans, it’s the lyrics first, production second and melody last. I am not saying the lyrics are not important, but for us Swedes, for whom English is our second language, we just try to make it understood by a world audience. Because of this focus on lyrics, some of the American songs are complicated and can sometimes be not much fun. While for us, we always try to reach to as many people as we can, so we have feel-good melodies and simple lyrics so everyone can have fun.”
At least in Ekberg’s view, the distinct difference between the Swedish and American approach here is in the commitment, right from the outset, to create something that is easily accessible to all.
It is an approach borne perhaps from the Law of Jante, an influential set of principles that espouses collective mentality and success above individual successes. Here are the first four of the 10 rules of Jante:
- You’re not to think you are anything special.
- You’re not to think you are as good as we are.
- You’re not to think you are smarter than we are.
- You’re not to convince yourself that you are better than we are.
The Swedes even have a unique word lagom, which is often translated as “just the right amount,” or sometimes “perfect-simple.” Following this principle in the context of tech or business could easily translate into an understated sense of humility, one that creates the inclusive mentality that Swedish products or brands have become known for.
“Global companies based in Sweden tend to be painted in 50 shades of Jante,” wrote Christopher Harress in the International Business Times, “For examples, Ikea and H&M respectively offer simple furniture and clothing for ‘the people’ at cheap prices that remain in line with the ethos of attractive ordinariness.”
Simplicity & Design
Apple’s enduring success has been due, at least in part, to their ability to capture the concept of simplicity.
“I love it when you can bring really great design and simple capability to something that doesn’t cost much,” the late Steve Jobs once said. “It was the original vision for Apple. That’s what we tried to do with the first Mac. That’s what we did with the iPod.”
If you look at Swedish brands, everyone from longstanding Swedish stalwarts (Ikea and Volvo) to the new generation of tech companies (Skype, Spotify, Mojang, and King), it’s possible to draw a parallel with those same qualities.
Great design. Simple capability. And reasonable pricing.
It doesn’t take the greatest stretch of the imagination to see how the Swedish cultural concept of lagom encourages these qualities. After all, a key component of great design is universal functionality (something anyone can use), and simplicity (resonating with the idea of “just enough” and not overcomplicating a brand’s value), which is as an important characteristic of brands today.
How Can Brands Emulate Swedish Success?
Sweden has long been viewed as a paradigm of social democracy. Running through the country’s national consciousness is a collective mentality that continuously plays up the virtues of the group.
It’s no coincidence that many successful Swedish tech exports have been social tools, such as Skype and Spotify, and social games such Minecraft and Candy Crush Saga.
For brands today the social element, or a sense of collective purpose, has become a crucial element of that success. Of course, there are other important factors that contribute (design, simplicity, accessibility), but the commitment to these virtues stems essentially from the endemic collective consciousness that runs through Swedish culture.
At the risk of generalization, the relationship between brands and consumers is becoming more social – and with social networking platforms and user-generated content, so are the interactions between consumers themselves.
The success of Swedish brands globally has been due to the fact that their cultural mindset aligns to a great extent with the digital mindset, the we rather than the you, and perhaps… if brands want to emulate that success, they too need to instill that “we-ness”, a collective mindset that always puts the group before the individual into their organizations.