FDI GETS UGLY! (UGLY COOKIE, THAT IS!)
Julia Lemagnen talked with MICAH GLAND about his journey with investment promotion agency Helsinki Business Hub, his new venture with Finland-based Arctic Startup and his own startup business in the food industry: Ugly Cookie.
I asked Micah how he got involved with foreign direct investment (FDI) in Finland: “I was the first employee of Helsinki Business Hub.[i] When we started, we built it up from absolutely nothing and we didn’t know very much about investment promotion. I can remember us googling the term ‘FDI’! I was at Helsinki Business Hub for over ten years, and the journey was really remarkable and inspirational for me personally. By the time I left I had had about six different business cards!” Had he enjoyed his time at Helsinki Business Hub, I wondered. “It was a lot of fun”, Micah responded. “I learned more there than at many other jobs.”
Helsinki Business Hub: how it all began
Micah left Helsinki Business Hub in early 2017 and has had some time to reflect on his achievements there. The organisation was started with a high level of funding from the city of Helsinki and the surrounding municipalities, with a general aim of attracting more investment into the region. Micah’s biggest challenge in the early days was figuring out what the job was and what their organisation could do to add value to the process. “From the very beginning, we didn’t want to just promote ourselves and produce a lot of hype. Rather, we were focused on adding value,” Micah said. But it is a complex situation to manage, as Micah pointed out: “Whilst it might be clear that the job is to bring in companies and get them to invest and create jobs and pay taxes, the truth is that you’re not in control of much of that process. So, you add value where you can, and sometimes you do a wonderful job but still lose the deal, and sometimes you get really lucky and something great happens and you get the credit for it. Both scenarios are a bit unfair, but it is the nature of the work.”
Putting metrics in place to measure the effectiveness of investment promotion activity is one of the hardest issues to face. IPAs around the world still struggle to decide how to set reasonable and achievable targets for the parts of the process that are within their control, Micah believes. He also found it a challenge working with one foot in the public sector and the other in the private sector. Helsinki Business Hub was Micah’s first role in the public sector, and he confesses he was a bit ignorant: “I assumed people were a bit lazy and slow and afraid of losing their jobs, but I’ve gained a huge amount of respect for those folks. They are among the hardest working and most intelligent people, and their heart is in the right place. If there is a problem with the public sector, I believe it has to do more with bureaucratic processes, a focus on organisation over mission and how money is allocated.”
Micah credits Michel Lemagnen, co-founder of MCJ Lemagnen Associates[ii], with helping him and his team to establish their modus operandi and proposition. Michel started working with Micah and the Helsinki Business Hub team back in November 2007. “We had some great discussions and a lot of those important values that are a bit hidden came from those discussions, like not believing the hype, facing the brutal truth and taking a stand when you need to,” Micah said.
Challenges and lessons learned
Getting different cities and municipalities to work together effectively can be a major challenge for investment promotion organizations in any country. It’s a challenge Micah knows well from his Helsinki Business Hub days. “We were a guinea pig to see if it would be possible to do joint promotion under one brand,” he admitted. “Companies can only locate in one city and it always ends up as a competitive situation. Ten years on it is easier because of our past experience, but the same challenges are still there. We should be looking to make the overall cake bigger, and the only way to do that is to work together, so everyone wins. On our own we haven’t the resources to make a big enough impact.”
“It’s important to understand that in the customer process there are places where collaboration makes sense and ones where it is a competitive situation and you should admit it and that’s fine. Someone will win that case and when it’s over you go back to working together. It’s better that another city close by wins it than all of us losing it to another region. The people doing the job on the ground understand this quite well. It tends to be the financing organizations that have difficulties accepting that some of their money is being put for the common good. We dealt with a lot of similar situations when working with other Baltic Sea Region locations too, but from a regional perspective we should be competing with the Mediterranean, or California or Shanghai – not with each other.”
Arctic Startup: return to the private sector
Micah has now jumped with both feet back into the private sector, and is working with Arctic Startup[iii], a media and consulting group that provides support to startups in the Nordic and Baltic region. What attracted Micah to Arctic Startup? “I had known them since the beginning and always liked what they do. They were focused on startups before it was the hottest buzzword. One of my last tasks at Helsinki Business Hub was to look at corporate startup collaboration, and to see if the big foreign-owned corporations would be interested in working with Finnish startups. Successful corporates in all industries and all over the world are concerned about disruption and many have or are developing a digital transformation strategy, so it was relatively easy to go and speak to them. They always want to work with external innovators and often also want to work more with startups.”
The Nordic and Baltic region has a very strong startup ecosystem already, and Micah was able to make some valuable introductions, leading to good deals for the corporates, the startups, and the facilitators including Arctic Startup. His role now is to help Arctic Startup to work with bigger companies in this way. One of the most notable recent successes has been with the banking group BNP Paribas, where Arctic Startup brought together Finnish startups with a team from the bank’s internal innovation unit, in order to solve a specific problem. There are many other examples of the success of this startup community development approach: “Most corporations have startup programs, which enable them to learn to be more agile and to retain better talent. It’s a matter of being part of the community instead of sitting in their ivory tower,” according to Micah.
Ambitious internationalization plans
Arctic Startup have some interesting and ambitious plans for internationalization in the future. Currently they are a Nordic and Baltic player based in Helsinki, with some people based in the Baltics. They have expansion plans and are aiming to solidify their base at home while also taking some of their bigger events outside the region. They also have plans to get much more involved with startups themselves. And whilst they often work with quickly scalable tech startups, this is not their only area of interest. Micah explains: “If you are really sceptical, you might say that the idealised growth path for startups is to raise a lot of money, create hype, acquire users and then to sell to FAMGA (Facebook, Apple, Microsoft, Google, Amazon) before anyone realises it’s not a viable business. At least, there’s a lot of noise about this path. Arctic Startups wants to support all kinds of ambitious startups and prefer those that are revenue-earning from day one – including companies that have physical products. This is an important and often overlooked segment. I find it intellectually very interesting to see what can be done in this space. It also helps that I’m getting a chocolate chip cookie business off the ground, which is completely focused on sales – not raising money – to fund its operations.”
Ugly Cookie: a deliciously good idea
Going into business for himself seems a logical step for Micah, but what led him to the idea of going into the food industry? “The idea for Ugly Cookie[iv] came from growing up in the US. As a kid, the way we learned about business was to set up a lemonade stand and you sell to your neighbours. Last year my wife went away for a couple of weeks so I did this with my two kids, but instead of lemonade, we made cookies. We all love cookies, and I’m a bit of a ‘foodie’ too! But it was mainly to teach them about business. I then found a business opportunity and one thing led to another. Having my own startup also gives me some amount of credibility in my Arctic Startup work!”
Eight months later, Micah has established a company, his products are made in a professional kitchen and he has a web shop for Finnish customers to order online. “We will see how it goes – this might work!”, he said, “but even if it doesn’t, it’s a lot of fun and at least I have had a try.” Micah’s business model is taken directly from the US fresh baked cookie segment. In the USA, five of the seven main companies operating in this sector are among the fastest growing franchises in the country, yet in Finland and Europe as a whole this segment hardly exists. Is this because Europeans don’t like chocolate chip cookies or the costs are structured differently, or it is that Ugly Cookie is an idea ahead of the curve? Micah is grasping the opportunity with both hands and is building his own brand with a high-quality product. His experience of working in and with different types of businesses for so many years will certainly stand him in good stead. Michel Lemagnen adds that having tried every one of the cookie flavours on a nice evening with Micah and his kids, he confirms that they really are the yummiest cookies he’s ever tasted!
Julia Lemagnen has worked in international business for 25 years in both business-to-business and business-to-consumer market research. She previously worked as Market Intelligence Manager for logistics company Unipart Group, and as part of a UK-based brand research agency she handled marketing and research assignments for clients such as Microsoft and 3M. She is experienced in a wide range of industries and research methods and has been working in the field of economic development and foreign direct investment since 2002. Julia co-founded MCJ Lemagnen Associates with Michel Lemagnen in 2010. https://www.linkedin.com/in/julialemagnenmcj