I was at a conference in Oslo and someone asked the question straight out:
How does Norway become as good as Sweden at building AI companies?
First answer from the room: "We're already better than them at cross-country skiing." Laughter. Then silence. People looked at each other with blank expressions. Nobody had a real answer.
Good question. And as someone from Gothenburg who just moved back from Stockholm, I sit on a parallel version of it: how does Gothenburg measure up to Stockholm? And if we're already there — how does Stockholm become better than Silicon Valley?
I'm going to answer all three at once, because it's the same question.
It's an ecosystem, not a company
Stockholm works because it's had time to work. Skype, Spotify, the Stardoll mafia, most recently Sana — sold to Workday for $1.1 billion in autumn 2025. 1 Internet and dotcom companies have existed there since the late 90s. Old finance guys with deep pockets are deep into tech. The private equity world is right next to it. It's a full ecosystem that has existed for decades.
Take one of our angels as an example. He's invested in over 30 companies, helped build several earlier ones, has an exit behind him, has money — and most importantly, he reinvests that money in the ecosystem. That's where the magic lives.
Because it's one thing when a company sells and the money lands straight in the founders' pockets. It's something else entirely when that money comes back into the next company. Or take the Norwegian Oil Fund: kroner from Norwegian oil parked in Tesla — the fund is one of Tesla's largest external owners with over $5 billion in the position — and thousands of other foreign companies. 2 Fine returns — but it doesn't build a domestic ecosystem. You have to invest in your own.
And when ten, twenty, a hundred of these people reinvest at the same time, something happens: the early capital required to break loose becomes available. You can put together a board where someone has already taken a company from zero to fifty employees. Someone who has done an exit. Someone who already has the contacts and knows how to sell a B2B product to a large customer.
This feeds itself. The first five companies do well, sell, and the talent gets pumped back into circulation. The next wave is ten. Then thirty. Skills compound, money compounds, contacts compound. The momentum builds on itself.
Take Klarna as an example: according to Accel, at least 62 new startups have been founded by former Klarna employees — Europe's most productive fintech founder factory. 30 Spotify has done the same: roughly 85 VC-backed companies founded by ex-employees, who together have raised $2.8 billion. 31 That's compounding in practice — the company that got big trains the next generation of founders, who build the next generation of companies.
Silicon Valley has had this mechanism running since the 70s and 80s. That's why it's hard to beat.
Stockholm by the numbers
This isn't abstract. Stockholm pulled in 253 billion SEK in VC between 2020 and 2024 — number one in Europe per capita. 29 Sweden took 8.4% of all European tech funding in 2024, second place in Europe after being fifth the year before. 28 And Stockholm ranks second globally in unicorns per capita, behind only Silicon Valley itself. 35
That's compounding showing up in statistics. The question is whether we deserve that position five years from now.
What needs to be in place
"What it takes to make a startup hub: nerds and rich people."
— Paul Graham, Why Startup Hubs Work (2011) 34
Stockholm has both. Oslo has the first — and is starting to get the second. Starting an ecosystem from nothing requires four things at once:
1. Early capital. Not grants from the eighteenth agency that requires the project to satisfy fourteen politically-set bureaucratic rules. Real money from people who have done exits and know what they're doing.
2. Founders with the right backbone. High technical level, organizational skill, someone who has already built something. Either they exist in the environment, or the environment attracts them.
3. A talent pool that grows with the companies. Juniors who are easy to shape. Experienced salespeople. Product managers who have implemented something ten times before. People who have been on the ride at earlier companies.
4. The ability to even get started. Before you have an investor, you're on your own savings. You work in parallel, take a leave of absence, live on a consulting pot. My own starting capital was a consulting sum I had worked together — it funded the time I needed to build the prototype that became the foundation of Labelf.
This first step is harder than people think. And it's one of the places where society can help the most. Real employee stock options that aren't taxed to death. Founder-friendly tax treatment for early employees. Tax breaks for investors who take real risk in early-stage companies.
The US has QSBS — Qualified Small Business Stock, Section 1202 of the Internal Revenue Code. Invest in a qualified early-stage company and hold for five years, and you can exclude up to ten times your basis, or at least ten million dollars, completely tax-free at exit. 3 A five-million investment can generate fifty million in tax-free capital gains. That's why the willingness to write early checks is so high there. The upside is enormous. And the upside drives behavior.
Schools are network, not skill
The first thing people instinctively point to is the universities. Stockholm has KTH. Boston has MIT. The Bay Area has Stanford.
That's the wrong cause.
All technical information is online. Everything can be self-taught. What schools actually deliver is network: you meet someone whose dad has done an exit. You already know who to call when you need a marketer, because it was Lisa who was great at it back when you sat in the same lecture hall.
That part is valuable. But in raw skill, school doesn't matter — it's negligible. The role of schools is an effect of the rest of the ecosystem already being in the same place. Not an independent advantage.
And the tech team doesn't even need to sit in the same place. My technical team is remote first. There's no reason product builders should sit next to each other and disturb each other while they're coding. They can just as well sit in Discord like gamers — build their things, share screens when needed.
Real talent finds what it needs on papers and GitHub. They don't depend on some lecturer teaching them the basics.
(That's a different question if you're cranking out code monkeys for pointless internal projects with no real depth. Then you need junior engineers on site. But that's not the part that builds an ecosystem.)
You need a domestic early-adopter market
If you're building direct-to-consumer, you need access to a home market that consists of early adopters, not laggards. Operate in a country where everyone is waiting for the technology to mature and it's incredibly hard to innovate.
Sweden had unusually high internet penetration during the dotcom era. 4 When things started moving, the audience was already there. Spotify was born in a country where smartphone adoption was high early 5 — that gave them a base to test against before going global.
That's not a coincidence. It's a precondition.
And now the big one: buy versus build
This is what holds Sweden and Norway back the most right now. And it's what politicians, enterprises and the public sector can actually change directly.
If you're building a B2B product, there has to be a culture of buying instead of building in-house.
The question an enterprise should ask itself:
Why are we building this tool ourselves, when 300 other companies have exactly the same problem?
Because when you answer "because we want it customized" and kick off an internal project with one of the big consulting firms, two things happen:
- You spend several times more money than you would have paid for a SaaS, and it takes several times longer.
- You kill the chance of the domestic startup that could have solved the problem — because it gets no customer, no reference, no revenue.
And when your internal project stalls or has to be scrapped two years later, you buy a solution from an American company that managed to grow in the meantime. The Swedish or Norwegian company that had a real chance — that could have been your American company's competitor — no longer exists. You opted out of the whole team.
This also applies to municipalities, regions, agencies and the armed forces. Letting massive consulting firms build in-house instead of procuring from new companies is a national economic waste. Two losses: more expensive solution and killed ecosystem.
Where does talent spend its hours?
The same logic applies to you.
You have a limited number of productive years. Don't spend them on Accenture's big contracts. Don't spend them building internal tools for Amazon. Don't spend them on a custom system that dies with the contract.
Spend them on something that can scale. Find a problem a hundred companies have and extract it. Join the ride at an early-stage company. Or start your own.
You don't get a Spotify out of a staffing firm. And you don't get a product ecosystem out of a country where the product thinkers sell their time piecemeal to big offices.
What politicians can do concretely
None of this has to be mysterious:
- No grants — easier access to GPUs instead. Google Colab's free tier 6 has done more for Swedish and Norwegian AI skill than any government initiative. Grant bureaucracy has spawned an entire industry of "apply-for-money" consultants — waste. What REAL AI companies and researchers actually need is compute, not project money in exchange for reports.
- Tax breaks for early investors. Reward the risk. The US QSBS model is a good starting point.
- Real employee stock options. Sweden has a scheme called KPO (Qualified Employee Stock Options) 7 that lets early employees receive shares taxed as capital gains (30%) when sold instead of as regular income (up to 55%). The idea is smart: people who take lower salaries and higher risk in an early-stage company get rewarded when it flies. In practice the rules are so narrow it barely works. Employees one through ten should be able to own a meaningful piece without taxes eating the upside. And the cap of three million kronor is nothing when the target is unicorn valuation. 8 Owning bigger pieces should pay off personally, not be punished.
- Founder-friendly capital gains treatment. That's where exits turn into the next generation's investments.
- Buy-first policy in the public sector. Smaller procurements sized so that young companies can actually win them.
Companies that fly bring in tax revenue from customers all over the world. That's a massive net positive. Rewarding early-stage risk isn't a cost — it's an investment with extreme leverage.
Thanks to the ones who dare
I want to thank the enterprise customers who choose to bet on new companies instead of building everything themselves with the consulting firms. You're the ones who actually create ecosystems. And thanks to everyone working inside enterprises who pushes "let's try this little company" — it's often individual people who open doors.
And to politicians, both Swedish and Norwegian: think about how you can make it easier, more open, more inviting. Simplify. Reward risk. Fewer eighteen agencies seeking money from each other. More capital straight to the people who build.
Back to the question
"There's never been a better time to be in Stockholm if you care about tech."
— Niklas Zennström, Skype co-founder, now at Atomico 32
How does Oslo become Stockholm? Norwegian capital reinvested at home. Norwegian enterprises buying from Norwegian startups. A first generation of exits creating founders with money, contacts, and scars.
How does Stockholm beat Silicon Valley? Lower costs, distributed talent, proximity to Europe, hungry founders. The only thing missing is the nerve to buy instead of build.
But honestly — the question is wrong.
This isn't about beating each other. It's about continuing to develop Scandinavia's already strong technical and economic position. How do we best boost each other? We're countries born from almost identical culture and history. We should be incredibly grateful that we're only a few hours apart. As a region, we can be even stronger.
Use that. Co-founders are sitting in both Sweden and Norway — Gothenburg, Stockholm, Oslo, all a few hours apart. Start companies together. Sit on each other's boards. Buy from each other. Invest in each other. Invest in Scandinavia. Bigger market, more experienced people available — better for everyone.
How we win
Build scalably instead of building internally. This has to be embedded in the collective mindset. Engineer not just the product but the processes, the scalability — the business itself.
There is an enormous amount left to do. And nothing is invented yet — people always think things are figured out, but they're not.
Buy from startups. Reinvest your exits. Leave the consulting project and build something yourself. And see the small companies for what they're becoming — not for what they happen to be right now.
That's how we win.
