Insights from a Seasoned Entrepreneur Turned into a Startup Investor: Tuomas Pahlman’s Journey
Hey there, this is Emily from Red Brick. Welcome to our “Mentor Stories” series, where we celebrate and showcase our mentors who are a big part of how we support startups in Red Brick Accelerator. We hope you enjoy reading them!
Tuomas Pahlman began his entrepreneurial journey in the early 2000s when he took charge of his first company. With his engineering background, he had noticed a gap in the market for affordable, high-precision sensors. This observation drove him to create a solution himself, and to spearhead his tech firm, scale it to a successful big data analytics company and end with an exit.
After not one but two successful exits, Tuomas decided to jump into investor shoes and joined the Finnish Business Angel Investor Network (FIBAN). He is focused on investing, screening, and mentoring startups. He is a very active mentor of the Red Brick network. His newest venture Höpöhöpö is a platform helping startups optimize their fundraising and investor reach outs globally. The platform has been one of the fundamental tools for Red Brick startups in our accelerator programs.
In this article, Tuomas sits with Red Brick and shares some milestones of his journey, transitioning from Founder to Investor throughout the years, and the lessons learned along the way.
Remembering the beginnings – early days were challenging. Raising capital was difficult, and convincing investors to believe in the company’s vision was a significant challenge, in addition to building a reliable team and managing product development. However, Tuomas’s persistence paid off: he kept refining his pitch and networking until he found the right investors and product-market fit.
When it came to team building, he prioritized hiring individuals who were not only skilled but also shared the vision. For first-time founders, Tuomas emphasizes the importance of deeply understanding the problem they aim to solve. Building a strong, versatile team is crucial. Startup entrepreneurs must be prepared for a long, challenging journey as the success rarely comes overnight.
The composition of the founding team is vital. Ideally, there should be a mix of expertise—someone strong in technology, someone with business acumen, and someone who understands the market. Each team member should bring something unique to the table. Tuomas notes that expanding the team can be challenging. Hiring one additional member is manageable, but bringing on five new people is a different story. It’s essential to ensure that each new hire fits well with the existing team and possesses the necessary skills. Both of those aspects are so important. The expansion increases the amount of work, particularly in onboarding and integration.
In his experience, teams that perform well usually consist of individuals who have done it before. Domain expertise is valuable. Understanding the market is crucial.
“If you’ve never played ice hockey, it’s unlikely you’ll make it to the NHL.”
The same principle applies to entrepreneurship. If you don’t know the domain, you must be willing to learn it thoroughly. Tuomas himself faced this challenge as a founder, having to learn not only the domain but also sales, marketing, and product development.
Balancing the need for both business and engineering expertise in a team is essential. Then there needs to be a balance between planning and doing. A team with only business minds might struggle to deliver a product, while a team of only engineers might struggle to sell it. Tuomas emphasizes that both skills are necessary for success. If you’re not with the customer, how can you solve their problem?
Early on, founders need to do many generalist tasks. As the company grows, deeper expertise becomes more important. Willingness to step out of their comfort zones, adapt and do what’s necessary at different stages of the company’s growth separate good founders from great ones. “If you’re a specialist and you’re not willing to do the generalist stuff, it’s going to be hard,” Tuomas says, highlighting the need for flexibility in startup roles.
In his role as investor-mentor, Tuomas believes in the responsibility of providing sound advice, and in due diligence. A mentor needs to be aware of their limits and ensure that their guidance is based on real experience. He prefers long-term mentorship relationships where he can have a meaningful impact rather than one-off meetings. With 40 portfolio companies, his bandwidth is limited, so he focuses on where he can add the most value.
“Founders will learn more by testing, learning from mistakes, and hurting. And that’s kind of the whole experience part, just test it out. So keep testing, and then you’re surprised what will work out.”
Tuomas adds, “I think investing and mentoring are also areas where you learn so much. I have also been learning in the past four or five years much more than building my own company.”
Tuomas is driven by curiosity. He loves learning about new ideas and ways of building companies. Each company is unique, one learns a lot from seeing different approaches to going about the problems they are solving. He tries to focus on where he can be involved in a much longer term startup-relationship. It’s incredibly rewarding for him to watch startups grow and be part of their journey.
Despite the inevitable challenges along the way, Tuomas finds great satisfaction in helping others succeed and in continually learning from his experiences. In the local ecosystem in Tampere, his name is strongly associated with giving back to the startup community, supporting new (and old) founders through guidance, feedback, and resourceful fundraising workshops/sessions. Not much left but to extend a warm thank you to Tuomas on behalf of Red Brick for being so selfless and active!
Red Brick is thankful for experienced and well-rounded mentors such as Tuomas, who play an important role in the shaping of our early-stage startup teams. We thank Tuomas for his advice and insight in helping our teams grow and succeed. 💚Has this inspired you to mentor a startup team? Get in touch, we are always looking for new mentors to join our family!