I’ve only just dipped my toes in the waters here in Copenhagen, DK, and I am already quite impressed with what I have seen. My exposure is light, but In the spirit of providing something of value to our worldwide community of readers, I’ll venture this: three things we can learn from the Danes.
1. The Danes have cornered the hygge market
You can be excused for not knowing about — no less knowing how to pronounce — hygge (roughly, “hyoo-guh”). But if you want to do business in Denmark, you better darn well know how to be hyggeligt.
Hygge is roughly described as “cosy” in English, but it has layers of meaning well beyond that. To North Americans, I would describe hygge as the Colorado vibe, where the most meaningful exchanges happen at the dinner table, at the brewpub, or on the trail.
Respected tech leaders in Colorado are likely to be seen having their most profound business discussions while walking the footpaths along Boulder Creek or cycling Lefthand Canyon. For example, it’s hyggeligt for someone to say, “Hey, I’ve got a business problem I’m trying to solve. Want to go for a walk?” Along the way you stop along the riverbank, take your shoes off, and wade into the stream. As the cool water is rushing about your toes, you get the sense that your issue can be looked at in another way. Your compatriot, whose toes are also soaking in the icy cold water, is challenging you openly, directly. This is hygge.
In Denmark, the culture of daily life — and importantly, the culture of innovation — is completely infused and fully supported by hygge. It’s a distinct competitive advantage to have cornered the hygge market in Europe.
Danish fintech CEOs get hyggeligt at the Nobis Hotel in Copenhagen, June 2019.2. An over-reliance on close relationships can become insular
Not only does hygge create stronger relationships but it also engenders much more vulnerability-based sharing, which leads to constructive conflict, which in turn drives organizations toward success. If you’re familiar with Patrick Lencioni’s 5 Dysfunctions of a Team (video primer here), then you’ll understand what I mean when I say that Danes have a cultural advantage when it comes to productive conflict. This is to be celebrated!
However, while Denmark’s innovation economy is built on hygge, for any outsider this presents a material problem. The issue is that Danes do Danes very well, but they tend to be somewhat insular, from what I understand. If you’re not Danish, you’re far less likely to be invited to do something hyggeligt on a regular basis. That cuts you out of the novel conversations, and it cuts the Danes off from your important insights. Net-net, that’s a loss for the Danes, their foreign guests, and the world as a whole.
3. The ecosystem must support innovation and scaling
Denmark is the land of Mærsk, Novo Nordisk, Vestas Wind Systems, Lego, Ecco, Bang & Olufsen, Nets, Saxo Bank, and of course Danske Bank. Denmark is 95% cashless; it’s a place where bank accounts are virtually automatic for anyone holding a social identity number. Yet it’s also apparently difficult for startups to scale here. This I learned from Danish entrepreneurs: Nordic incumbents seem to be doing whatever they can to stall challenge from upstarts — that includes both large corporations and government. This is surprising to me, and something I need to investigate further. But as one participant at the CEO Roundtable said, “you’re not going to change the world if you’re intent on clocking out at 4:30 PM.”
The fabric that makes up a culture supportive of fintech innovation involves educational institutions, research institutions, regulators, tax authorities, law and accounting service providers, large enterprises, startup communities, investors… plus, plus plus. Everything has to be working in concert. It’s not enough to just get one thing right. This culture that seeks to develop constructive, collaborative environments appears to promote internal innovation well. If only it could figure out how not to stifle scale-ups, Denmark would be able to produce (and hold on to) innovative companies of massive value. Stay tuned for more on this interesting topic.
Again, I have so much to learn. Denmark has a lot right and — I’m stepping out on a limb here — a few things it needs to improve upon. I don’t have certainty yet on what I would offer for advice to the Danes, but I’m working on it. I’ll return to Denmark soon to meet more entrepreneurs, refine my understanding, and offer a strong opinion. Until then, keep moving.
