As a venture capitalist, I naturally spend large amounts of time thinking about business and technology models and their evolution and propagation. I also happen to be interested in culture and history. In the course of my reflections, I noticed a curious trend among many technology businesses that either materialized directly out of the Scandinavian region or were created by entrepreneurs of Scandinavian origin that had had exposure to their cultures in a meaningful way, even if they no longer lived in the region.
This trend consisted of a particular flavor of tech innovation, what I call “equitable technologies.” These are technologies that level social, technological, and commercial playing fields by decentralizing control and redistributing it to individuals. The businesses built on this innovation were articulated in many forms and industries but at their core operated on these same principles of distributed decentralization.
The underlying technologies making up this trend all echoed some of the same spirit of the early Internet: they began (and aimed to stay) free of charge; they were universally accessible and shared; they were driven and built by the larger community; were easily improved upon; and they were deeply divisive to existing businesses and models, weakening entire traditional industries as they gained momentum.
The fact that this technology phenomenon seemed to manifest itself in Scandanavia is not a coincidence. Nordic innovators and inventors were culturally predisposed to develop such technologies:
The Nordic countries hold to an unwritten but deeply felt and practiced code called Janteloven or, in English, Jante law. This code, regardless of an individual citizen’s conscious adherence or acceptance of it, comprises a deep, omnipresent undercurrent of Nordic culture. The code prescribes egalitarianism, collectivism, homogeneity, and conformity as values to be protected and practiced by citizens. To subscribe to the notion of individual gain or individuality over the collective ethos; to consider oneself superior in any way; or to display any shard of elitism is abhorrent, undesirable, and unacceptable. You might say it’s pretty much the exact opposite of how we think as Americans.
Under Jante law, a Nobel Prize winner is expected to not think herself better or more valuable to society than the town mechanic, and the beautiful woman will likely be as truly modest and self-deprecating about her good looks as her homely cousin. Anyone who has spent any reasonable period of time in the Nordics will recognize this aspect of the Nordic character which usually reads as a charming humility and a reticence to accept compliments or take credit. This playing field leveling manifests in the Scandinavian welfare system where, in places like Denmark, university, pension, health care, parental leave, and social services are high quality, free, and the right of every citizen. (The price for such an idyllic society however, is that the entire social infrastructure is supported by cripplingly heavy taxation.)
The general culture and sociology that bubbles up from such deep rooted homogenous ideals has historically contributed to maintaining overall domestic and comparative international affluence, keeping crime low and neighborhoods safe, institutionalizing some progressive ideals, and encouraging a civil, predictable way of life. But it has also held desires like competition, comparison, and pursuit of success in check, while they run rampant in modern commercially, competitively oriented societies like the United States.
But these same longstanding collectivist conformist traditions that have choked competition have, consciously and unconsciously, created a foundation for technologies that have had great impact because of their distinctly egalitarian and collaborative character. Nordics have repeatedly pioneered technologies that have had notable societal and sociological effect. Technologies such as Linux, Kazaa, Joost, and Skype are decentralized innovations and technology which was designed to benefit and belong to everyone.
Let’s take the computer operating system Linux as an example. This open-source OS was a remarkable product at creation and arguably more robust than what existed at the time. The self-effacing publicity-shy father of this technology, Linus Torvalds, developed the core, offered it up to anyone who had an improvement with the stipulation that the code behind the addition would be made public, and gently guided the evolving system to power a staggering array of services, software and hardware, all free of charge. This system earned the reverberating goodwill and support of the tech community, ultimately organically creating a formidable and powerful threat to the reigning incumbents in the operating system industry.
Torvalds, the creator of Linux, grew up in Finland, a part of its Swedish minority. Nordic Torvalds, by all accounts, apparently was–and presumably still is–a consensus builder, smoothing out what must have amounted to hundreds of disagreements between developers that were all contributing to the improvement, evolution, and future of Linux over the years. Though Torvalds also held the potentially mind-numbingly lucrative trademark to Linux, he felt he didn’t really “own” any of it. He not only managed to maintain this neutrality but also protected the technology from those who would hijack or marginalize it.
A second example of this technology trend comes from the Swedish-Danish duo of Niklas Zennström (a Swede) and Janus Friis (a Dane), the co-founders of Kazaa. Kazaa not only jeopardized the traditional manner in which video, audio, and other media was shared, but also consequently threatened the gigantic industries and business models built around development, commercialization and distribution of content. The network-based free peer-to-peer (P2P) software they developed not only delivered media through communication pipes but created lucrative new businesses (such as the notorious drive-by-download adware that came bundled along with Kazaa software) that ultimately allowed the original application to stay free of charge. Invention spawning invention.
In their next incarnation, these founders applied their knowledge and experience to telephony. The resulting offering, Skype, was a novel, fun, seemingly harmless IP-based messaging and communication application that became incredibly popular because it was free. It allowed the individual to supplement–and even supplant–their current purchased communication products with easy, free phone calls, shifting power to the individual consumer. It quickly became clear the software had the potential to disrupt the entire global communications industry model catching the interest of investors and incumbents.
It is both interesting and ironic that the very ideals that promoted the egalitarian and homogenous, when exposed to highly commercial environments and cultures, can become the driving forces that can disrupt and transform the status quo. The culture of humbleness, it seems, can be an active, fertile birthing ground for impactful, disruptive technologies that focus on equality and the needs of the many.