The New Vikings
Sven Christer Nilsson left Ericsson to help launch Scandinavian high-tech start-ups
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Jack Mikrut Kod-Pressens Bild for TIME
| Sven Christer Nilsson spent 17 years at Swedish electronics giant Ericsson — including 16 months as ceo — before leaving in 1999 to view the world from the eyes of a start-up. Last November the 56-year-old Swede co-founded Startupfactory, an early stage investment firm specializing in wireless companies. It counts among its financial backers Japan's Softbank and Investor, the Wallenberg family investment arm. Startupfactory has so far invested in six wireless companies in the Stockholm-Helsinki corridor, including Picofun, a mobile Internet entertainment content company which Nilsson chairs. He is also chairman of Utfors, a Swedish broadband company. Nilsson recently talked to Time's Jennifer L. Schenker about the global tech market and the role that European companies will play in its development.
TIME: The U.S. missed the boat on wireless. How long will it take them to catch up?
Nilsson: Major U.S. companies have woken up. They have been very PC- and fixed access-oriented but are shifting their strategies. You still don't have the general market for wireless in the U.S. because the mindset is not there ... but when the U.S. accepts something as good, change can come very quickly. And I feel it is coming.
TIME: Will Europe produce more companies like Nokia and Ericsson?
Nilsson: We have very small domestic markets in Scandinavia, but from the age of the Vikings we can say we have run global trading from this part of the world. So there is definitely a basis for new global companies emerging from here. But the shift from manufacturing to knowledge-based companies means companies can have their headquarters anywhere. This means regulations have to be adopted to make Sweden competitive with places like Silicon Valley when it comes to personal and company taxes.
TIME: What type of European tech companies are most likely to succeed?
Nilsson: Components and application companies. Look at Altitun, a Swedish company which came up with a software- controllable laser. It was sold for almost a billion dollars to ADC, an American broadband company. Qeyton Systems, a Swedish company which develops compression techniques to send information over optical networks, is another example. Cisco bought it for almost a billion dollars.
TIME: Does this mean the best of Europe's new tech companies are likely to be bought up by U.S. companies?
Nilsson: It seems like U.S. companies are very rich today and eager to be in the lead, so yes, many acquisitions will certainly go the North American way.
TIME: Will entertainment services be one of the mobile Internet's killer applications?
Nilsson: Many years ago when I first started studying mobile Internet and third generation phones I was convinced it was a business-to-business proposition. Then NTT DoCoMo launched its i-mode service. [i-mode allows customers to use their mobile phones to exchange e-mails, do their banking, make airline reservations and use other Internet services.] I have seen figures that indicate that probably over 40% of all the transactions are actually entertainment services geared to the consumer market, and I have heard a figure of over 50% of the bottom line is actually derived from entertainment. Even though Western Europeans and Americans do not have as great a passion for gambling and games as the Japanese, there is a definite interest. So yes, entertainment and infotainment will be a big part of the revenue stream in future.
TIME: Won't European companies entering the entertainment sector face fierce competition?
Nilsson: Most of the competition comes from the PC arena, where higher speeds allow for the creation of more advanced games. To go from that to mobile phones is going at it from the wrong angle. It will take a long time before mobile devices are as fast as today's PCs. The challenge is to come up with very creative solutions on devices which have limited access speeds, display capacity and memory.
TIME: Is the difficulty in using Wireless Application Protocol (WAP) phones holding back applications like mobile games?
Nilsson: I don't think so, but WAP is very complicated compared to i-mode. I hope the wap Forum [an industry group] will open up wap and make it simpler, otherwise wap risks becoming a parenthesis in the history of mobile communications.
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