Getting to grips with logistics, labour law and local culture has helped web developer Stephen Cook succeed in Sweden's second city
Tired of the rat race in London, businessman Stephen Cook upped sticks and found a new home in Gothenburg, on Sweden's south- west coast. After a stint in a Swedish company, he started his own successful web development business, 23 gears, which creates apps, websites and bespoke systems. There have been plenty of hurdles to jump along the way, but as Cook explains, Brits are usually welcomed with open arms – and there are attractive opportunities for growth.
"Travelling to Gothenburg is straightforward, and the locals are extremely well-disposed towards people from the UK," he says. "I often say that it gives me a sales advantage being English, because very often you'll meet people who are such Anglophiles that they instantly warm to you."
But the logistics of setting up in Sweden can be tricky. "At the point I started 23 gears I'd been established in the country for a while, so it was quite a natural decision for me to register it as a Swedish company," says Cook. "But there are quite high entry- level requirements for starting a business here."
Anyone looking to set up a limited company in Sweden will
need to fork out at least 50,000 krona (around £4,500) in share capital, and comply with strict regulations when it comes to hiring and firing employees.
"There's a very strong union presence in Sweden," Cook says, "and there are quite strong laws surrounding how you can release people from their employment.
"When you ask business owners in Sweden as you're getting up and running, the advice that you quite often hear is: don't employ people. I don't entirely share that view. We've looked into the possibility of outsourcing our work and having just a skeleton of employed staff, but I feel that for us there's been a big advantage in building up our in-house competence."
Although Sweden's economy is slowing, it is reasonably robust compared to many other European countries, and according to Cook, it's possible for overseas IT companies to use this to their advantage. "Sweden has not experienced the same financial pressures as the UK over the last couple of years and the employment situation is more stable," he says. As aconsequence, Cook suggests, it's quite difficult to recruit experienced IT staff in Sweden. This may create opportunities for IT companies that already have employees in the UK, where hourly rates are lower.
FINDING A NICHE
Competition is tough among web developers, and 23 gears has worked hard to carve out a niche. "On the surface, there's a lot of competition," explains Cook.
"But it's more difficult to find a small, agile developer that has the level of competence that we have. There tend to be two extremes in the market: on theone hand you have one-size- fits-all companies which have a publishing system or a content management system, but you have to then adapt your business processes to their model. Or, on the other hand, you have the very large consultancy firms that can deliver anything you want, but with a very high cost level. Our goal is to be in the middle.
"What makes us special is that we're producing customised web-based systems for companies that have unique Chorus of approval: Gothenburg's Opera House at dusk. The city offers a warm welcome to Brits requirements. It could be outward-facing websites with unique functionality, or internal web-based systems that help businesses manage their relationships with customers. We focus very much on the actual requirements of the end users."
Before setting up in Sweden there's one main risk to consider, Cook warns: it's more expensive. "People cost more," he says. "A great illustration is that in the UK, if you want to get a pizza delivered, then you just ring the local pizza place and they'll bring it around on a moped. In Sweden it simply costs too much to have people on mopeds delivering pizza, because of the labour protection laws and the high minimum wages.
"Another risk is that as you start to acclimatise to Swedish culture, you may feel that there are a lot of similarities with the culture in the UK. It's easy to think you can charge in and do things in the same way you would back home. But when you actually get down to it, there are sensitive cultural differences."
Cook believes Swedish companies are reticent about pushing new products and services. And while foreign companies may spot an opportunity, subtlety is needed. "To think you can market your products here in exactly the same way would be a mistake," he says. "You have to find things which would work in this market. There's room to push products more, but it's important to seek Swedish partners and to test things along the way."
LEARNING FROM THE SWEDES
So what can British directors learn from the Swedes? Well, says Cook, they network a lot. "There are a lot of mingles and meet-ups in Sweden. Networking is huge. There are networks for everything; online and personal networks, and it's a good way to get yourself started. Go along to breakfast meetings, shake hands with as many people as possible, and start finding possible contacts and connections."
Cook has been involved with the launch of a group called SIFFEK (Sveriges Internationella Företagarförening – visit www.siffek.se), which helps Swedish companies establish relationships with overseas firms. It works both ways, though, and foreign companies looking to launch or expand in Sweden may find that the membership fee (500 krona per person each year) is a worthwhile investment.
GOTHENBURG FACT FILE
Population An estimated 520,000.
Currency The Swedish krona has weathered financial storms well, and remains strong against the pound.
Language "I was employed here after four months," says Cook, "and my employers wrote into my contract that I could speak only Swedish in the office. The difficulty is that everybody here wants to practise their English."
Sightseeing "Everybody loves Liseberg (top), a fun park in the city," says Cook. "The other thing to do is to get out to the islands [of the Gothenburg Archipelago]. They're spectacular and so easy to reach."
Where to stay Cook's pick? "The Avalon. A pool hangs over the edge of the hotel." www.avalonhotel.se
Food "If you're looking for top-quality, Swedish food then Swedish Taste is my choice," says Cook. www.swedishtaste.se
Getting there "I mostly use SAS and fly into Heathrow," he says. Ryanair, BA, Norwegian and Skyways also operate flights to and from Gothenburg. Or book through WEXAS at www.iod.com/travel (020 7838 5989).
Useful contacts British embassy in Stockholm, 00 46 (0) 8671 3000.