Business competitions are a tricky concept. They are based around the idea of a group of humans evaluating (read: judging) teams and their ideas, and trying to overcome any biases they have in the process. Judges are basically asked to evaluate unquantifiable things with their very human and biased brains. They then make a judgement based on what they know and what they believe the future holds based on their backgrounds, experiences, and interests. And that’s completely normal. The judges are also able to evaluate team dynamics and make an assessment of whether the idea and team are likely to succeed, based on the human qualities that (still) give us a competitive advantage over robots.
It’s a balance, and competitions are, by nature, unfair. So when weighing the benefits of participating in any competition versus the reward at the end of the rainbow, sometimes the most logical conclusion for a startup is to focus on building the business rather than chasing a title that doesn’t have an absolute meaning or bring any value other than to stroke the founder’s ego and get their startup’s name in the paper for their 15 minutes of fame.
The Fastest Growing Tech Companies (as measured by age and revenue)
Deloitte’s Fast50 is not a competition per se. It is a list of the 50 fastest growing tech companies in a single country. And their measurement, fiscal year revenue growth, is free of any human biases competitions usually struggle with. Although this measurement doesn’t say everything about a company (i.e. good HR policies or healthy business practices), it is a simple, quantifiable way to segment upcoming companies. Launched 20 years ago in the US, it has expanded to over 40 countries worldwide, with over 30,000 companies listed on the local Fast50 lists and regional Fast500 lists. The competition was launched in Sweden in 1995, in Finland in 2005,in Norway in 2013, and last May Deloitte announced the launch of Fast50 in Iceland with an application round open through September 21st. The winners will be announced on October 23rd, 2015 at an event in Reykjavik, hosted by Deloitte.
To apply to Fast50, companies must have had at least four years of operations and their own proprietary IP or technology that contributes to a majority of the company’s operating revenues. Revenue in 2011 must have been at least EUR 50,000, and last year’s revenue must have been a minimum of EUR 800,000, or ISK 117 million. At first sight, that does not leave a long list of eligible Icelandic companies. Haraldur I. Birgisson, Fast50 team member and lawyer at Deloitte, says that reaching 50 companies in the first year might be a bit optimistic when even Australia didn’t reach 50 companies in their first year. He adds that Holland has been running the list for 16 years and that they are now having trouble accepting the stream of applications every year.
“Holland had to recruit companies to apply for the first few years, as is the case with most of the countries when they first launch Fast50. Hopefully Iceland will get where Holland is now within five years of launching,” Birgisson adds.
Speaking of Holland’s Fast50, Dutch serial entrepreneur and DJ, Sebastian Hooft, advises entrepreneurs to start measuring their success early on and that Fast50 is a great forum for that.
“It’s just like buying one of those smart scales and entering a competition with your friends. It will enable you to measure yourself and your efforts against competitors, which in the end is appealing for your current and future stake-holders,” Hooft says about his experience of having been a co-founder of a company listed on Fast50 in Holland which, he says, was a major milestone in the company’s funding efforts.
The 40+ countries that run the Fast50 every year are divided into three geographical zones; EMEA (Europe, Middle East and Africa), APAC (Asia Pacific), and North America (USA and Canada). The companies that reach their country’s Fast50 list get access to the Fast50 network within their region and are eligible for the regional Fast500 lists.
Hooft adds: “The Fast 50 list is one of the few independent lists out there. That’s why the value of being on that list is very high. Fast50 is relevant.”
Rising Stars, Take Note
Now, for those startups who are younger than four years and not at the EUR 800,000 in annual revenue mark (yet), Deloitte offers another option. A competition, yes, but one that might provide a value other than a title and 15 minutes of fame.
To apply, companies must show a turnover of EUR 10,000 (grants count) and turn in an investor deck (at least a draft) and annual report for 2014. Applications are free and these are documents that most companies have at hand, so the threshold is very low. The panel of judges evaluates the company, team, and scalability based on the applications. The Rising Star Award is only run on a local level, but the aim is for the Rising Stars to one day end up on the Fast50 list.
An external panel of judges will choose 4-6 companies that will pitch at a final event in October. The panel of judges will then choose two companies to be awarded – one with a female founder and one with a male founder. Iceland will be the first country to strategically work towards a gender equal award ceremony and Birgisson hopes this will contribute to more female role models to become visible in the Icelandic tech scene.
The panel of judges will be made up of representatives from The Federation of Icelandic Industries (SI) and The Association of Women Business Leaders in Iceland (FKA) as well as Helga Waage Co-founder & CTO at Mobilitus, Bala Kamallakharan, Investor and Founder of Startup Iceland, Gudrun Arnbjorg Saevarsdottir, Dean of the Department of Science and Engineering at Reykjavik University, and Hilmar Bragi Janusson, Dean of the School of Engineering and Natural Sciences at the University of Iceland.
Winners go to Deloitte’s Entrepreneur Summit in Dallas
Competitions and awards in the startup industry are often criticised for not really providing any value for companies – sometimes rightfully so. But Birgisson says that the Rising Star Award gives a lot of exposure for the winners. Their pitches are recorded and promoted within the Fast50 network, many of whom have innovation teams that recruit companies to join them.
And last week, Deloitte and its partners FKA, SI, and NMI announced that they will invite the Fast 50 and two Rising Star winners to attend Deloitte‘s Entrepreneur Summit in Dallas in November 2015. The winners will have a chance to meet up with 7-10 of the investors in the group for 1-on-1 meetings and hopefully create valuable connections on an international scale.
For more details visit Deloitte Iceland’s Fast50 / Rising Star website – and remember to apply by September 21st!