Unikie, a software developer headquartered in Tampere, Finland, has succeeded in what most startup entrepreneurs dream of while racing from one technology event to another: signing collaboration agreements with several leading technology providers such as Nokia, Solita and Valmet.
Esko Mertsalmi, the chief executive of the four-year-old startup, uses an ice hockey analogy – a relatively common trait in that part of the country – to explain the success.
“Get the puck to the net and good things will happen,” he remarks self-deprecatingly.
“We’ve put in a lot of work,” he adds to expand on the analogy. “But maybe the logos of big international clients [in our references] have been a bit easier to come by than we dared to expect initially. I suppose we’ve just been doing the right things successfully.”
Unikie, he tells, was initially prepared to spend the first five years building a platform that enables it to run a profitable business domestically and pursue its internationalisation goals.
The startup is seemingly ahead of schedule. It announced recently it has signed agreements with a handful of major, but unnamed, automotive manufacturers in Central Europe. A growing number of its staff are consequently working on developing machine vision and pattern recognition solutions to enable cars and other machines to recognise and evade people and obstacles.
Its other main markets are telecommunications, smart industrial machines, and traditional internet and information technology.
“The solutions we’re increasingly providing for autonomous driving and smart industries, they require all of these four areas. It’s a smart strategy for allocating our competences. The cars are not driving themselves with all of the necessary stuff under the hood,” reminds Mertsalmi.
Steady, self-financed growth
Unikie has recorded a profit in each of its 48 months in operation and added to its headcount at an impressive pace. The company wrapped up last year with a staff of 250 spread across its subcontractor network and a turnover of 16 million euros, 80 per cent of which was derived from Finland.
“We’ve been growing on a cash flow-basis,” Mertsalmi tells.
“There haven’t been any big growth spurts. Four years, 250 people – that’s a pace of about 50 a year. The turnover target for this year is 30 million euros, but whether we’ll meet it still depends on a lot of things. We’ll break the 25 million-euro mark for sure, though.”
The startup, he views, has managed to carve out a share of the highly competitive market by taking advantage of the megatrend of digitalisation, aggressively pursuing international growth and – simply – offering unrivalled quality, regardless of cost.
“We aren’t competing with low prices; sometimes we’re more expensive than local alternatives. But we’re expensive because skilled labour costs money. We’re genuinely trying to identify the competences and find the best workers. And that’s a lot easier to justify when your prices are transparent,” he explains.
Although Unikie is involved in developing software for the machines and vehicles of tomorrow, it has one finger firmly on the pulse of the needs of existing technologies.
“We’re not only focusing on what’s coming 10 years from now, but we’re also developing solutions for today’s systems. I’m talking about things like how to update software remotely, how to enable motorists to add new features to their vehicles and how to connect phones to vehicles,” lists Mertsalmi.
Belief in Finnish engineering
Unikie’s belief in Finnish engineering expertise has proven another key differentiator, according to him.
“Internationalisation, for us at least, has always been about exporting Finnish engineering expertise. The prevalent thinking in the industry is that you should create a product and hope that it sells. But that’s a difficult way to generate traction for exports,” he says.
Mertsalmi points out that the digital transformation, which has been forced abruptly upon companies regardless of their industry, can be particularly challenging for well-established companies.
“The change needed to evolve into a technology firm in an agile fashion is massive for companies like automotive makers, which have grown into dominant brands on the strengths of their logistics systems,” he says.
Large corporations, he adds, may struggle to make the digital leap also due to the burden of their legacy solutions.
“Things don’t get simpler but more complicated, because many have a 20-year legacy of information technology solutions. You can’t just toss out the legacy, but it has to be taken into account in further development. That’s why the solution has to be more complicated,” explains Mertsalmi.
“Luckily Finland has plenty of capable people to solve these problems,” he adds.