Tomi Kaukinen (host) [00:00:00] This podcast is brought to you by Allies. Allies is all about bringing growth to the software services industry. It's a platform where hundreds of companies grow together by exchanging talent, projects, and best practices. In this podcast, we will bring you the stories of the most successful companies and people in the business. We cover topics from sales, marketing, H.R., and culture to give your ideas for future growth. Welcome once again to the Allies podcast. I'm Tomi Kaukinen the host for today, as usual, and today my guests are Riikka Uimonen and Jussi Siltanen, right? Got it right. When we were discussing if everybody says Siltana, but it's Siltanen, and I got it right. Who are you guys? Let's start with Jussi.
Jussi Siltanen (Senior Partner at Reaktor Group & Co-Founder at Fusion Ecosystem) [00:00:44] Yeah. Once again, I'm Jussi Siltanen, and I'm a father of two sons and I have a beautiful wife as well. Just chatted to the earlier that it was 20 years last week when I joined Reaktor very small startup back then. I started by my friends, and I was finishing my studies and then and then I'm checking out that Helsinki Business School something. Would there be something that I spotted? Okay. Reaktor is looking for it was Sales something.
Tomi [00:01:25] So this was, what year was this?
Jussi [00:01:27] Uh, 2003
Tomi [00:01:29] 2003?
Jussi [00:01:30] Yeah. Then I chatted with my friends that, okay, you guys are trying to figure out something. I think you're going to go bankrupt or something.
Tomi [00:01:43] What are friends for?
Jussi [00:01:43] And then we chatted and then. Then we agreed that okay let's, let's do so that you'll join for, for a bit and then, and I'm still here.
Tomi [00:01:53] But your shirt says Fusion.
Jussi [00:01:55] Yeah. Yeah. It does.
Tomi [00:01:56] Let's get back to that.
Jussi [00:01:57] Yes.
Tomi [00:01:58] Because you joined a Reaktor, which is kind of a legendary software house.
Jussi [00:02:04] Hopefully.
Tomi [00:02:06] Because I moved to Finland in 2007 from Sweden and in Mannerheim there is this big Reaktor and everybody was talking about this legendary and now I have you in here so nice to meet one of the legends.
Jussi [00:02:20] Good to be here. Thank you for having us.
Tomi [00:02:21] So Riikka.
Riikka Uimonen (Fusion Ecosystem Investments & Development) [00:02:23] Yeah, so Riikka Uimonen, the same team as Jussi and also part of the legendary Reaktor but a rather new one so two years at the house and yeah so part of Fusion Ecosystem core team and driving, co-founding and funding activities there and my background is a management consulting and financial services. So yeah, well.
Tomi [00:02:47] What companies? The big four of management consulting?
Riikka [00:02:51] No actually Accenture, but one of the big ones anyway, but not in the big Four, but still a global huge company. And yeah, good experience.
Tomi [00:03:00] And very lovely British accent there.
Riikka [00:03:03] Thank you. I did. After high school I took a year off. I had an argument with my father that's should I like what a year off actually leads to? And he says that he's going to end up poorly and out of work. But so, we compromised. I moved to London and studied fashion, design, and marketing, but then some leaps forward and I ended up in financial services. I don't know what happened, but he and I.
Tomi [00:03:29] Because you never hear Finnish people with this British like accents. You hear this it’s this rally England thing, it's like yeah, a very good, very nice. Or there's this weird which I have this blend of American and all Finnish, Swedish that kind of stuff. But that's, that's very nice. It's, it's not common to hear it.
Riikka [00:03:48] Yeah, cool.
Tomi [00:03:50] But the reason you are here is because Allies have joined the Fusion Ecosystem.
Jussi [00:03:59] That's right.
Tomi [00:04:00] And that's what we're going to talk about.
Jussi [00:04:03] Okay.
Tomi [00:04:04] Why take it? Why in the world it Allies join this Fusion Ecosystem. And what is it? So let's start with what is this Fusion thing?
Jussi [00:04:14] Uh, you want to go first?
Riikka [00:04:16] Well, shortly. So Fusion is an alliance or network of digital development companies. You know, I call it portfolio, network, or ecosystem. We have a bit over 30 companies in each, and we are focused on professional services. So consulting, digital developments in the industry. And so all of the companies, they are growth companies. The smallest ones are two people at the moment, and the biggest one are some hundreds. So we have quite big range of different companies that actually like, let's say, mission to help other companies to do their digital transformation.
Tomi [00:05:02] So how is this different, different from a company that just hands out like the resources and stuff to others. Are you facilitating that in a way, or how is this working?
Jussi [00:05:17] Yeah, this is kind of I would say that this is a combination of, let's say, traditional investment. Obviously, these companies, they are looking for money or investment, that's what we can help them. Obviously, they are looking for a network of corporates and partners. That's one point and obviously they are looking for coaching so that we could help them to go forward with their smaller companies and get them to grow and prosper.
Tomi [00:05:48] It's not it's not traditional startups, right? Or is it?
Jussi [00:05:53] Yeah. Not, not traditional. They are at the first they are usually startups that we, we start them by ourselves or co-found or invest in a smaller company. At first they are startups, but they are in their line of business is uh, digital services or IT services and so on.
Riikka [00:06:16] And what is probably like make sense of what is common between these companies are is that first of all, like I said, professional services or consulting, that is the industry that they have in common. So, like I said, like, are these traditional startups. So we don't have any product companies in that sense. Yeah. So, so all of these offers are services or expertise or the like, most important resource, expertise like talents. There are some companies that do work with some products like Microsofts or Salesforce or those kind of still the key services company. Yeah, exactly. The other thing that like what is common between them is that they are old growth companies. So in that sense, startups are is that they aim at the growth. They are probably brilliant agencies that are for two people, even ten, 15, something like that. But these are like kind of high growth ambitions and also a willingness to scale. So we are searching companies that have potential to scale, like gain growth with scale. And the third one that they have in common is that they have synergies between each other. So kind of like overlapping capabilities. So I code you code, we both code even more. So there is like a collaboration potential between the companies.
Jussi [00:07:49] Yes.
Tomi [00:07:51] Yeah and Allies has been in the Finnish market since its inception and I think this in a sense puts a little bit of a quality stamp on Allies to further its growth in the Nordics. What do you what do you say is that one of the aims to put that stamp of quality on it?
Jussi [00:08:06] Yeah, sure. If if that happens, that's brilliant. Obviously what we are looking for when investing in Allies that we see huge potential in them, you know, having this company that that can be a bit more flexible with the prices compared to Finnish companies. Obviously nearshoring is one component. Yeah, that's very, good to have. We already got one company that's kind of, uh, operating in the same field Software Sauna in Croatia. But having that, we it's been very good journey with them. So, so obviously we are looking for cooperation between Fusion companies, but that's not the only point where you want to help Allies to grow. And we don't mind them doing stuff with whoever. So it's, it's not kind of Yeah.
Riikka [00:09:01] And what probably like what Allies gets from joining Fusion and at least we hope hopeful that they like that is probably the reason that I like when we discuss with the companies that we have in the ecosystem. Why did you join? Like what is the benefit you get out of this? So the typical answer is that when you drive a professional services company or digital agency, it's better to do it with within a network. So kind of you can leverage, leverage each other's capabilities for superior growth. So that kind of helps you grow faster. So talking about the ambition and like Allies, they have ambitious growth targets. So that is going to hopefully help them. And then what you said about the brand and kind of like seal of approval, I don't know this stamp of quality. So that is definitely what we aim at doing, is that like if a customer or anybody like who's talking to Allies or any other of the companies, so they're like, Oh, you have Fusion company, So you're kind of like, Oh, okay, you must be really good at what you do because we want the kind of the best of the breed to kind of join us in that sense and ensure that the customers also get what they expect. So that is really important, so kind of different kinds of leverages that they could use when you joined Fusion. And of course, the community part is not just that you are entrepreneur yourself and do it solo, but it's sort of being a bigger community and like Fusion so we are international. We are not just in Finland, but we are like from the States to Japan, from the Nordics, the Mediterranean. So you kind of like the breadth of the scale of the operations and if you want to internationalize or anything. So you kind of like endless options that you can do.
Tomi [00:10:56] Hmm. I could ask. I have so many questions and so little time. I don't know. Let's see where to start. Okay. So instead of, you know, a lot of development companies or whatever they're called nowadays, services companies, they grow through M&A, they just buy up and then they vertically integrated thought out spinoffs and studies and. But you did not.
Riikka [00:11:32] Hmm.
Tomi [00:11:33] You created an ecosystem instead.
Jussi [00:11:34] Yeah.
Tomi [00:11:35] Tell me a little bit about this business logic.
Jussi [00:11:38] Uh, maybe if I go first shortly, and then you can go forward from that. Yeah, that's true. And that's what typically happens. We at Reaktor, we figure that, okay, Reaktor is pretty good company and good brand. We have well, we realize that, but trying to build all the capabilities or many, many more capabilities inside Reaktor, we figure that, okay, it's not going to be that easy. Will they want to join? Can we find people? Is it trustworthy from the customer side? Okay, We go there and say, yeah, we do everything and we are the best at everything. It's kind of ridiculous. Yeah. So it was all we figured, okay, that the IT scene and digital scene is going to go forward anyways. Maybe if we tried building companies on investing in different companies and bit by bit we, we learned we have learned through the years. And then of this, the wave came this far and it seems pretty good.
Tomi [00:12:47] But, but this was not the first kind of approach because I remember in my startup days you had something called Reaktor Ventures.
Jussi [00:12:56] Yes.
Tomi [00:12:57] This is, is it still alive or did it merge into this or what happened?
Jussi [00:13:01] It's alive.
Riikka [00:13:01] Yeah. And it's actually the kind of the whole history that I Jussi referred to. So back in the day, there was Reaktor ventures and they Reaktor was probably one of the most active investors in that startup scene. And back then, those investments are really what companies that are funded. So they were kind of like you said, so traditional start up, so product companies and etc. and the portfolio. And right now, so no new active investments, the new companies, but the kind of portfolio is still alive and knows that Morreau ventures and that.
Jussi [00:13:40] Not part of Reaktor no more. But it's alive.
Tomi [00:13:44] Okay, but the lessons come from there or?
Jussi [00:13:48] Yeah, yeah.
Riikka [00:13:55] No but it was in back then so it was in 2013 Reaktor also did, so you can call them kind of strategic investments. So investing in companies that have similar business or kind of overlapping capabilities you could ask was Reaktors consulting business. So the first one was Finitec, which is a kind of I.T. freelancer company, and then also back then, Wonder Dog, which is also co-founded.
Jussi [00:14:32] They were ten years ago.
Riikka [00:14:33] Yeah, exactly. So the kind of history is quite a long back, but like right then so probably something was learned from the Ventures time as well. But then kind of seeing the difference that these are obviously strategic and also something opportunities that have collaboration with the Reaktors like the core business and then years go by and those kind of new companies join and invest in new companies. And to be honest, I don't know what happened first, but the network of the companies started to act like an ecosystem. So kind of like it wasn't just collaboration between Reaktor and the companies themselves, but between those companies. So it wasn't just like two way collaboration, but more like a network, a living, vivid ecosystem. So it makes sense to call it an ecosystem.
Jussi [00:15:34] Yeah, yeah, yeah. I would say that's like maybe four years ago that the strategy around the investment changed so that the way it would be investing, you know, companies in that similar line of business Reaktor is acting in consultancy services and I.T. services and digital services.
Riikka [00:15:54] And so yeah, for the time being it was mainly led by the kind of founders and the main legal head of legal at Reaktor. But then kind of I think it was a bit over three years ago when the first Fusion person was kind of employed to the team and the core team that we have four people. We are still quite lean, but so back then, so it's like the kind of like clear decisions like, yeah, now we these actually something is good. This is what we're believing, the kind of the world is going to that direction, that this makes sense to actually grow and build growth and help customers in a better ways through this kind of ecosystem model and not just like being a solar, like you say, M&A operations, but like doing this growth and leveraging our partners in the kind of network ecosystem model. So, hey, let's build this. And also what is so great is that the long history it enables many good things such as are people start knowing each other. So you have the history and the time that has led to that. People trust each other. So in the network you have the kind of personal relationship between the kind of founders of the companies and who drive the business. So that.
Tomi [00:17:11] Here I want to interrupt you a little bit because in my mind, what I'm seeing is basically a company that just invests in several service companies. But you were mentioning that there are actually stuff happening laterally between these companies. How in practice is this happening?
Riikka [00:17:30] That is definitely not trivial because I think that is probably the core of this whole operations is that enabling these companies to collaborate and especially, I don't know if the salt or sugar is or what it is for this Fusion, but like what is our work is to help them, the companies to find each other. So of course, we have kind of networking events and kind of like people find each other. But probably when you truly connect is when you find business opportunities together. So that is what we want to feel. And of course, Jussi and Tuike they drive in like the business base are kind of like sales activities, etc. So finding those opportunities to grow together. And then of course, on the other side, we have those kind of peer groups. That's for example, if you drive marketing in one company, especially smaller companies, might be that you don't have a marketing team You are solo or you didn't even have a marketing person. So have these kind of like sparr and find each other to kind of maybe find answers to some questions that they wouldn't figure out otherwise. And then, of course, we have this kind of I don't know if you call it services, but hubs or connection points, for example, when we drive our marketing. So we try to find ways to activate the companies to, for example, write a blog post together of some like thoughts, leadership, etc.. So kind of making us concrete as possible in a business beneficial way because that is the way that you find those kind of meaningful connections. And of course, between a companies that is like natural way of human beings, communicate like trust cannot be built just like having one lunch somewhere. You need to meet and work together and come round like many times before you actually connect in a in a really deep level. Yes. And that requires time. And our work is to enable those connection points and help people to find each other. So it's not just the business connection, but the kind of personal human connection.
Tomi [00:19:53] So events, you invite them to the house, no to your office.
Riikka [00:19:58] I would like to have a Fusion house.
Jussi [00:20:01] Yeah, yeah, yeah, yeah, totally. Tomorrow we're going to have this get together for or for co-founders and business leaders of the Fusion companies, and we are hosting it. And basically what we do, we try to facilitate that. There would be stuff happening and people would know each other. They have one on one connections, and that some connections come through us. But the we don't want to be in the way. So if, if they want to connect and do cooperation, for example, with each other, it's by all means.
Tomi [00:20:33] Fusion within Fusion.
Jussi [00:20:34] Yeah, yeah, yeah. There. There are a lot of sub ecosystems emerging. Yeah. And that's fine for us.
Riikka [00:20:40] And it's quite natural. Like if I'm I'm the business leader, founder of a company is not that all the 30 companies are like natural collaboration partners for me. So like, like finding those kind of sub ecosystems or clusters or do you want to call it. So I have the usual suspects that I go to. So maybe I'm a software development company and I we don't have any designers, but the company of designer. So we collaborate to build products, for example, or I might have these growth technologies companies. And then we find that the friends collaborate throughout the kind of growth technology journey, or if you should say so. So kind of like we also help these companies to identify the kind of closest friends, etc., to build those even deeper connections. Yes.
Jussi [00:21:28] Yeah. Yeah.
Tomi [00:21:28] If we move past. I mean, there is certainly some sort of philosophy behind this kind of thinking, because as we mentioned earlier, you know, the M&A strategy is, you know, they go to you just go to that one on one box of growing and you go to mergers and acquisitions and now you moved here. Mission, purpose - these kind of values must certainly be. Yeah. Close to this. Yeah. Yeah, sure. So let's go a little bit into the philosophical side of this. Yeah.
Riikka [00:22:00] We summarized the mission to build and grow thriving companies, and there's probably kind of a double meaning to that maybe. So, first of all, is the kind of entrepreneurial sites on that mission. So we help founders to build thriving companies and new startups in the digital developments. So that is what we want to do good companies and well-governed and thriving, growing, etc.. So fuel entrepreneurship in that sense. And the other part of it is probably that these companies that we help to build and grow, so led by the founders and the teams and experts, they help other companies to thrive in the digital world. So kind of like you said, this is our way to enable better digital transformation or digital opportunities, future, etc. And I don't know the reason or the trends behind it's a like Jussi mentioned earlier, is that first of all, the credibility for the customer. So we believe the customer truly gets the best when collaborating with specialized companies. And like I said, it's not credible to say we are good at everything, like when you're not. And especially why is that so is that on the trend side? Is the talent side like if you if I'm for example, I'm really passionate about cybersecurity. I want to work and just like go deep into cybersecurity and find other people who are really deep into that. So I try to find my way to those people and I might even find a company around that's so I kind of attract similar kind of deep expertise. And if I was a customer, I would want to get those deep experts to handle my cybersecurity. Yeah, so that makes sense that you get the best service from the kind of specialist companies. And then comes the kind of challenge. But hey, but do you only do cybersecurity? But I would also need a solution. For example, like some, some new, I don't know, platform or software something. And then it's about scale. Like you can do really that niche thing well, but how to scale and the scale of services and then customer is in the problem. But I need the scale even though I need that deep expertise. So when you have an ecosystem of many different deep specialists or the companies to have the kind of expertise and best expertise of everything you can by collaborating combine both the scale and the niche. So kind of like that collaboration between these companies enable their customers get the scale they need, but also the best experts that they want. And if I'm if I would be the kind of like really super talented, something I'm generalist, so is that same? But anyway, like I said, I would want to work with some who are at least as good and passionate about everything. And I wouldn't want to do anything like side hustles at all. Like let me be focused on this one. So entrepreneurship and building a company is then an option for these kind of talents to kind of, I don't know, build a career upon their mission and their passion and everything. And kind of the model that we do is probably easy to enable this kind of entrepreneurship to people who are probably nuts. Entrepreneurs like born entrepreneurs, for example, many of the founders of the companies they have like 20 years of corporate career and then just like, Hey, how can I leverage this expertise that I have and experience and everything? And should I, should I like, how should I how could I like and really want to maybe are interested in entrepreneurship, but I haven't taken the leap. So kind of building that trust, they hey, this network is actually great and you are not going to be alone and you have like great brilliant minds never being the at least I. So I never being the smartest person in the room. So you have like really, really good people around you. So that may be helps them to start their entrepreneurial journey.
Tomi [00:26:40] But. But I need to get deeper into this because so I mean, these companies, they're also competing against each other.
Jussi [00:26:50] Yeah. There are some cases in some cases, obviously, that we have many companies that code. Yeah. And there's plenty of room for coders in the markets. You know.
Tomi [00:26:59] Yeah. Yeah.
Jussi [00:27:00] If it would if there wouldn't be, it's kind of game over anyways for everybody if they compete each other to death. Fusion company it's no point being in the market as well.
Tomi [00:27:12] And also like do you buy I don't know if this is public information or anything, but do you buy majority stakes in these companies?
Jussi [00:27:19] Both, yeah. Majority and minority. But the thing is that there are so much there is so much more cooperation possibilities compared to competition. It's kind of there. We don't mind that there is competition from time to time, but it's not fierce, I would say. Uh, but for looking at things from a customer's side, they kind of, uh. They kind of get it really pretty easily. What's Fusion all about? We can say that. Okay, We have this set of companies in the Fusion, and we can do this and this and this. They are. Okay. Beautiful. How does it work from now on? So it's pretty simple. It's two options. One option is that it's it works as a one stop shop. You can buy everything from Fusion Ecosystem or Reaktor or whichever part of the Fusion or you can you can do you can do cooperation directly if you need to have cybersecurity, it's Fractal. We are going to introduce you to the Fractal guys. So basically, the bigger the companies there, the more and they say, okay, we are into that one-stop shop thing where we have so many vendors and everybody's calling all the time and so on. Is it possible to get everything I heard from, from, from one. Yes. Point And we say that yes, it's doable.
Tomi [00:28:48] So but it reminds me of maybe I'm wrong, But, you know, I think it's Unilever who owns or it's Procter and Gamble or Unilever either. So I always mixed these up that own like Ben and Jerry's and stuff. But they never you know, they never tell you that straight. They're just like, well, Ben and Jerry's this small little niche kind of ice cream by these two guys. They're like, No, no, no, no. Yeah, they're like super big corporate. Tell us a little bit about that. Why? Am I wrong?
Riikka [00:29:16] Well, you can.
Tomi [00:29:17] Kind of keep an arm's length distance, but it's still yours in a way.
Riikka [00:29:20] Yeah, well, like, for us is really important that the companies, they have their own identity and they feel that we are independent. I drive their business as their own, and we are more like a platform that they can lean onto and kind of like when they want to jump. So we are here to support them and not like kind of big brother. They're like, Hey. And that is also kind of like for the brand as well. So we did like when we did they. Don't do that.This business do this business don't, no but like when like a Fusion brand was created his own, like a couple of years old. So like, like even though we had a long history, so the brand is quite new. So the kind of reason for it like it doesn't say anything like Reaktor like we, we did like a idea like Fusion by Reaktor, Reaktor Fusion etc. But the kind of idea behind like if I'm an ambitious entrepreneur and I have my like brilliant business and passion and like I don't want my company to be like, like inferior to some, some like bigger brand of something. So more like the Fusion Ecosystem is platform and definitely bringing those absolutely amazing brands of these experts companies. And what Jussi was talking about for the what the customer so the customers are like it's it's the like digital maturity of many companies. It has increased significantly and many companies operate in a kind of multi-vendor world. And if I would be a decision maker in a company and buying some digital services, I would not want to work with those vendors who cannot collaborate with others. So the kind of like, you know, take the fierce competition side like, oh, you know, those other vendors are not good. We are the only good and those are the ones make only bad decisions. But like this, like for, for the philosophy sake. So this needs to be change, and especially in Fusion and why this is with this why this is a good solution for the customers as well and both for the companies is that's kind of even though they had the competition in the within the ecosystem and they are kind of overlapping capabilities. So it's kind of twisted around and the mindset that we share between Fusion companies and each company that joined. So you kind of I don't know if you say criteria, but it's also companies that share the philosophy are drawn to this kind of ecosystem and what we call it. It sounds like a slogan. It probably is and is brilliant in my opinion, is collaboration over competition. So that means that seeing your competitors as potential collaboration partners and make the collaboration seamless. So when I as a customer.
Tomi [00:32:13] Very idealistic.
Riikka [00:32:17] Isn't it? Isn't it? And for some really weird reasons though, that actually works. And it's so beautiful. And like I said, it sounds like miraculous, but it is and is probably a criteria. Like if you don't share the philosophy is not the place for you because you can build the kind of networks and ecosystem in that sense the kind of yeah you mark territories and like hey, this is my side and this is your side.
Tomi [00:32:42] Yeah I mean. I Think it's not that it sounds very easy now, but I have to challenge you on this one because these are still companies with, with founders that are probably very ambitious, want the market share and stuff. So there's certainly must be a little bit of attraction there still.
Riikka [00:32:58] Well, you can think of it's either you divide the cake or you grow the cake and we on the grow to cake business kind of thing. So bigger shares for everybody, even though and of course sometimes happens that there's a really juicy project on like many companies would like to have and shit we didn't get it the other ones. So then it may be time to look in the mirror and this time we lost. Next time is probably or the other way around, of course, and we call it a näätailua. I don't know how you translate in English.
Tomi [00:33:31] But. Yeah, yeah, yeah. No, don't be up.
Jussi [00:33:37] Almost all the companies they do cooperation with some other company from the ecosystem. Oh, almost, almost all the companies do cooperation. It's voluntary. We don't force anything.
Tomi [00:33:48] I think that is very good clarification that this is the magic. Yeah.
Jussi [00:33:53] Yeah, yeah. We don't force anything. Are some or some of the companies, depending how big they are, how small they are always, they have their own sales, they have their own recruitment and so on. So all the major processes have to be in place so that we don't, we don't want up around these companies. Obviously we have the people in, in, in board and, and so on, but, but they run their own business. I would say that tip the cooperation between ecosystem companies or with some other ecosystem. When you look at the turnover, it's like from 10% to maybe 60% or 70%. The smaller you are, the more likely it is you're going to do, for example, access to the subcontractor to a bigger ecosystem company.
Tomi [00:34:42] So I'm trying I'm trying to phrase this intelligently. So from a let's say from a customer point of view, I'm in need of services right now. In my mind, what I'm thinking now is. That your end game would be something like, I want to buy services. I see Fusion as a brand in itself and I think, Oh, I can get new services, but also access to this network, which is backed up in the end by Reaktor So I'm not buying a one stop shop. Huge big thing, but I'm buying myself into the potential of a larger network.
Riikka [00:35:28] Exactly. And it applies even you would be, you might be a customer to some of the Fusion companies. So if I would be like, I don't know, based on Slate in any of the companies that we have, any of the 30, you still get access to that. So like, even like I'm a company in Spain, I'm called Nivea. So when I like.
Tomi [00:35:58] Isn't that snow?
Riikka [00:35:58] It is, yeah, that's the background of it's so when you like, get access, you work, operate with Nivea, you still get access to the whole network and that.
Tomi [00:36:10] Which means you have to you have also inFusion. You have to brand yourself and put yourself out there as well. Yeah, you certainly must have a brand strategy as well to push this message. Yeah, right. Well, what about cannibalization? So you have Reaktor and you have Fusion. Yes. You're kind of competing for, you know, still money with these. Partly, not?
Jussi [00:36:37] So it is Fusion competing with Reaktor consulting, I would say not that much. Maybe slightly, but not in a bigger scale. Reaktor is very good in what they do, you know advisory services and they do bigger projects. If you have if you want to build digital only operator or whatever you call them and they'll do it for you. Most of the ecosystem companies have a bit different services. It's more of smaller, smaller team, more of a scaling up. A existing team company is running their own team an their own projects, so they are looking for talented developers or so on. But at some level, obviously there might be competition, but it's not something that we are trying to go away or go away from totally because the market has to be that big so that it can't be a problem if we compete with each other because then you would be way too small market if that's going to be a problem.
Tomi [00:37:56] Yeah, because you mentioned, I think if I remember correctly, if I get into the Fusion Ecosystem as a company, I get access. I can get access to markets outside of the Nordics, right.
Riikka [00:38:12] Yeah! Well it's is still that you do the kind of market expansion you're as an individual company and growing your operation or expanding operations abroad. That is purely still your business decision. That's kind of like, for example, in Spain so we have several companies operating in Spain, so kind of accessing,learning from the markets and finding those collaboration opportunities and etc.. So it makes it easier for you to kind of get to know your new potential markets. And kind of leverage the and collaborate with the local companies who already have operations there. So kind of like making your market and that is an option. But they still always a decision of the individual company if they want to do that, if they want to explore, of course they can expand to any market where we are not operating. But it's just like because of the global network and network of the company operations. It's not the Fusion as such. Like our core team is based in Helsinki at the moment, but exactly.
Tomi [00:39:17] Yeah, they want to expand and make that decision and expand. Yeah, maybe it gives them a little bit more comfort when they send out their, you know, sales proposals and stuff as they actually get access to, to the larger network, Right? Yeah, Yeah. And also I think you mentioned Wunderdog there in Spain.
Riikka [00:39:34] Malaga.
Tomi [00:39:36] I spent the winter in Malaga, so yeah, it was nice.
Jussi [00:39:40] Spain, Germany and Finland. But the thing is that there might be competition every once in a while, but for example Reaktor they are huge cooperation partner for smaller, smaller and bigger Fusion companies. The Reaktor is subcontracting a lot of know-how from that Fusion. There is over 100 people from Reaktor project at the moment as we speak. So it's a huge potential for the smaller Fusion companies to cooperate with. Every once in a while a Reaktor might get a project that they would have wanted to win themselves. But that's how it goes.
Riikka [00:40:20] And probably again, to that like divide into cake and grow in the cake, is that like even in Finland they like Reaktor and Fusion companies that get together. They are not owning the whole markets. Like there are lots of digital developments happening beyond these companies. And if we go abroad to new markets as that is even a bigger opportunity. So again, having the growth mindset in a way that's looking beyond the kind of like narrow circle that you are so kind of seeking for these opportunities. But of course, like I said, so something happens that you would want to do that project and then it kind of is competition. But these people are smart that are in the ecosystem of the founders and the people who drive the business. So they kind of also understand the kind of business rules or the how the world works kind of thing. So investing is quite healthy in my opinion.
Jussi [00:41:24] The beauty beauty is that they don't have to build everything in their inside their company. For example, if you're a software company or you have coders, you don't need to have designers because you have adventure club in the ecosystem. They are really good at that. So there is no point building your own capabilities because you have you have the very good companies in the ecosystem that already does it and they, that they know them and they know that they can trust them. So it's a good opportunity and the bigger one as well. For example, a Reaktor. Reaktor is acting globally and they are looking for a lot retailers, e-commerce companies. Okay. Many times they bump into, okay, we have Salesforce. Are you are you into Salesforce? And it used to be they were like, uh, maybe kind of, but no. Yes. No. And now we have Growberry that are really good in sales force. It's a very good, very good option to be used when, you know, you have a huge sales case. You can say that yes, we, we can handle the salesforce, no problem.
Tomi [00:42:36] Exactly. But here we come to just to make it extremely clear. I like concrete. Yeah. So yeah, we mentioned M&A strategies. We mentioned like this vertical integration. Yeah. But like what is some of the like actually defining differences between this strategy of building the ecosystem and what others are doing, just buying companies and keeping them a little bit of an arm's length distance. What is the difference here? Sorry to put you on the spot here.
Jussi [00:43:10] No, it's a good question.
Riikka [00:43:11] Yeah, it's probably and doing this like fueling this entrepreneurship are making this driven by the founders and the top experts and helping them to find the kind of best solution for the market and find the best growth opportunities and then try to support these. And back these up. Really building upon the kind of collaboration culture, a culture of collaboration and a trust between the people and really using that collects the wisdom that we have in the network. So I don't know if it's fair to say like human entrepreneurship or entrepreneurship in a network or but anyway, so fueling that's human side. And I think that is a big differentiator both for the entrepreneurs but also for the business themselves and how they drive the business and how they build the growth. And that's something that I believe is a modern and like the future as well, is not that to kind of those building in narrow and inwards driven is more that being open to the community around you and learning from each other and also learning from the history. And still like in entrepreneurship, they're like shit, Monday days. Like it's tough and it's, it's, it's tiring and, and, and you really sometimes feel that giving up and you going to meet those struggles and like shit, this is hard, but at least you have the community and you have the kind of safe space to ask two bit questions or like, like, Hey, has anyone seen or been in this situation before? And it's quite likely that someone has or knows someone who has been in the situation. And then kind of overcoming those struggle is easier and is probably more fun as well. But then then like even though you are free to drive your company as you see as a founder, as a like, like the leader of the company and feel free to do so, but at least you can check like can some hiccups be kind of avoided? You are free to kind of drive those rocky roads if you wish to, but at least you have some people or community around you that could help the kind of smoothen out that path.
Jussi [00:45:43] Yeah. Yeah, I would say that it's a whole new category between this you mentioned M&A the traditional strategy that you buy and then emerge and they are all in a big happy family and they are all under the same brand. The other one obviously is that you have totally independent companies and they try to build cooperation networks and that would actually work. This is something in between. We have very well working network and at the same time we are as a Reaktor, we are acting as a investor or owner, as a minority or majority owner in these companies. And there is some something in between these words. And we think this is working pretty well.
Tomi [00:46:33] Yeah. And when the focus is in my opinion, when it's hard on that strong on the network it's I think it's easy for people to say yeah, we have this network and stuff, but I mean that really requires active pushing and working with these to get it going and I don't think that can be that easy, actually.
Jussi [00:46:56] Yeah, it's not, obviously. If it would be easy, there would be hell a lot of more companies in this space. But yeah, it takes money, it takes time. It takes a lot of things to figure out. And we've been doing this for, for a few years now and, and, and it's we are getting there. We are not there, but we are getting the get in there bit by bit.
Tomi [00:47:23] I love that. Yeah I love that what you said that we're getting there because the hubris in the tech industry, you know, I've been in tech industry for 11 years and it everybody knows everything sometimes. Yeah, I know. There's grand visions and stuff. Yeah. So I really love that. That modesty of understanding that it's not that easy because some other person would probably say, Yeah, everybody loves each other. And it's the next unicorn of unicorns in community building.
Jussi [00:47:56] Yeah. Yeah. And since we, we operate with over 30 companies and we are, we are partners and all of us there. Obviously we are getting a lot of results, but we have kind of scars to prove it. Made it so that we might have something to say. And we at this point, it could be wise to do this and or maybe not. We don't know about with this company. It worked this way and then with Reaktor if we look at 15 years ago when we were as big as you are now, we figured it out this way and it might work for you or it might not.
Tomi [00:48:38] Yeah.
Jussi [00:48:39] You know this also, there are already so many stories that we have seen and been part of. So it's a huge advantage for us.
Tomi [00:48:48] It's an incredible advantage. I do these tours in schools in Finland. I did three yesterday in a school for the second upper secondary and high school. And I always tell them that, you know, you cannot underestimate the experience. And I tell them, like when you where you're going to start your first company, it's going to fail. And they look at me like, What? Why me? I was like, it's going to fail and it's going to be a good thing for you. And they're like, What do you mean? Like investors don't like founders that haven't failed yet. They're. They don't want you to be the one they lose their money to. So you can go to an investor and you have one failed task behind you. It's going to be more probable that they're going to invest. Yeah. Yeah. And they're like, What? I was like, Yeah, because you learned stuff and you have stories, You understand. Maybe customer acquisition wasn't that easy as you thought in your Excels. You know, you didn't get the million users in the first quarter.
Jussi [00:49:49] Yeah, yeah, yeah.
Tomi [00:49:50] So you need to have the scars to.
Jussi [00:49:52] Say, Yeah, yeah. And then the thing is that many of the entrepreneurs who start the company with us, they wouldn't start it if there wasn't four for us or some, some sound something like, like us. It's, it's scary and we, it's, it's not easy kind of. It's basically easy and not scary. But when you get there and you start your company, it's always like, okay, what do we do next? And where are these papers coming for? What, what, what, what do I need to do next? We can help them.
Tomi [00:50:23] And to, Oh, my God. An hour just passed by so quickly. Just for the finals here for companies that want to get into Fusion, what can they expect and what do they need to do to get into that?
Riikka [00:50:39] Probably, like I said. So the criteria, or at least the scope that we investing is to ask the question, So are you in the professional services industry? Are digital agencies kind of like the industry focus? Are you aiming at do you is your business scalable? Are you searching to be like full scale scaled growth? And then also maybe how like exploring the ecosystem and finding the kind of like building the mindset that which of the companies could we build collaboration with? Like where do we see the synergies and what do I bring to the ecosystem? What can I benefit from the ecosystem like both ways. So those are kind of like things to first consider and then it's probably just give a call to me or my colleague, Heikki.
Tomi [00:51:32] Any limitations? What was there a big no no for something?
Riikka [00:51:36] Well, we like say like if you are already really big so we probably not the best thought and so we are best when you are really in the early stage and you can be, you can be with just the like a person with an idea of this kind of business and then we can explore. It's all right if there something that we could do together, or maybe you already have a team and you have like just started the business and you can then see if we can like support the growth of your business. So they're kind of like two ways that we are open to discuss. But probably when you are in a quite early phase is when we when you as like you, the company benefits the best from the ecosystem we can, the most help you with the growth.
Jussi [00:52:22] Yes, I would say so as well.
Tomi [00:52:25] Okay. I think we need to stop, unfortunately, we have to. I think we're just getting started. Maybe we should do these for our job.
Jussi [00:52:33] Yeah, that would be interesting. We need to get a beer or something.
Tomi [00:52:43] Okay. Time is passing by. Thank you so much. The hope is that these things, you can speak, like, for hours. Thank you from me, Tomi Kaukinen, Allies podcast. See you! bye!