A conversation with the Estonian serial entrepreneur and early-stage startup investment partner.
Why do people want to become entrepreneurs? For Rain Rannuthe reason was simple. “I wanted to do things that wouldn’t exist if I wouldn’t be doing them,” he says.
At the age of 19, while studying at the University of Tartu, Rain established his first company Digu OÜ – a web design and development agency in Estonia– with a bunch of friends. As a young entrepreneur, he enjoyed the freedom and independence of working on things that he wanted to. And there has been no looking back! But it wasn’t an easy ride, to begin with. “No, it was a lot of trial and error,” he confesses, “Our first two or three projects were failures, but we learned from each of them and we continued. You try something and you find out that it doesn’t work. Each new thing you try takes you a little bit closer to something that really works.”
There is no clear blueprint when you are building a startup, especially if it deals with rapidly-changing technology. But Rain was lucky enough to have a few mentors to guide him and his co-founders. “One of our key advisors was Linnar Viik, one of the fathers of the Estonian e-government. He was experienced and he really helped us all get the right insights and connections.” And being in Estonia really helped. “In 2010, when we were starting out in the SF Bay Area, all people knew about Estonia was Skype and that was it,” Rain shares, “But what truly helped us was that we were a part of a small community where everybody knows and helps everybody. In Estonia — everyone, from the president and prime minister to founders and CEOs are one phone call or e-mail away. That’s been a big benefit.”
Today, Estonia is known for many technology startups beyond Skype, its commendable e-residency program and other Government initiatives. Rain feels this has changed the game drastically, “We have developed this reputation of being a country that is not afraid to take on completely new and big challenges on a national level. And this benefits Estonian companies to a degree as well because it gives you a stamp of quality for innovation and technology. Companies benefit from the good reputation of Estonia and they, in turn, enhance Estonia’s reputation. So, it’s a virtuous circle!”
And are there any flip sides to being from Estonia? “Of course! The downside is that the whole market is pretty small and you do have to get out of your home country very quickly if you want to have a real impact as a startup,” Rain reveals. But he is quick to add that even when you go outside, the Estonian connections always look out and help each other.
From his first startup during college days to becoming a serial entrepreneur, Rain’s come a long way! He has created some tremendously successful products like Fortumo, a mobile payments service for digital content and app stores that was launched in Estonia but found traction and expanded 90+ countries in Europe, Asia, North and South America & Africa. But Rain claims that his favourite part of building a startup is the early phase. “I get super excited: you have to get the idea, find the first product market fit and really get the company off the ground,” Rain shares, “I worked on Fortumo for ten years but for many of the other companies I built, I’m really good in the early phases. And I’ve been lucky to find co-founders with the right skills who are better at scaling the company to success.”
Most people go through an up-and-down graph running just one startup. But as a serial entrepreneur, Rain’s must have been an extremely challenging ride! How did he stay focused on his goals and continue to pursue his dreams? Rain has a simple answer: “When choosing a career — either as a founder, employee, investor or a creative person– you have to find something that is related to your passion so it would sustain you through the highs and lows. Choose something you are good at or willing to invest a lot of time to becomegood at, and where there is sufficiently good chance to find a sustainable “business model” — meaning that if you do become good, it is possible to earn enough income to keep on doing it. You need a combination of all three, and if you do find it, this will carry you through the low periods, and reward you with enough satisfaction in the high periods."
Serial entrepreneurship automatically lead Rain to the next phase of his life. Rain, along with co-founders and managing partners Veljo Otsason and Marek Kiisa, launched Superangel, an early stage investment fund and company builder. “It’s been a gradual shift,” says Rain. “Six years ago, my partners and I were successful as entrepreneurs. We had some extra money that we wanted to give back and invest in other start-ups. We made a number of early-stage investments and some of them have turned out to be super successful.”
Rain loves being an investor. “I wanted to have a change of pace where instead of working and giving a hundred and twenty per cent to one company, I was enjoying sharing my time with multiple companies and helping them.” Some of Rain’s angel investments include Bolt (earlier known as Taxify, a top ride-sharing company in Europe and in Africa), Pipedrive (a Sales CRM & Pipeline Management software), Veriff (Online identity verification system), and others.
“You know some of the most successful start-ups in our portfolio have been founded by people who were just out of high school. These 19 and 20-year-olds make good role models for the younger people to pursue this career seriously,” he shares.
Rain believes that entrepreneurship can be cultivated and encouraged which is one of the reasons that Superangel also hosts programs like Alpine House and Palo Alto Club to cultivate entrepreneurship, especially among millennials. “The best way is always to lead by example. Ten years ago, Skype was the first Estonia-built product that made it big globally. And that gave a lot of other entrepreneurs a lot of confidence. It made them believe that they can be great. And now I think many other startup founders in Estonia and around the world are serving as examples for young people,” he believes.
Rain doesn’t stop with multitasking many business. “I have another emerging “passion” where I’ve been investing some of my time in the recent years,” he adds, “Film-making.” With one movie — Chasing Ponies, a road-movie about European students selling books door-to-door in the US, based on a real-life book-sales program — already in his kitty, Rain recently launched a crowd-funding campaign and trailer of his next film ‘Chasing Unicorns: Silicon Valley the European Way.’ Set to release in September, the film follows two European startup founders trying to make it big in the Silicon Valley.
Entrepreneurs without borders
From his ventures to his movies, Rain considers himself a global entrepreneur. He is excited about how over the years startups and entrepreneurs have broken mental and physical borders successfully and embraced these world-views. “The world is becoming more global. We have begun to see that successful companies can come from absolutely anywhere and be founded by any kind of people. This is very different from the situation that existed ten years ago. More and more people are starting their own businesses. And this is one of the really cool ways that you can help and develop the economy of your area, region and country,” he adds on a closing note.