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She takes startups across the valley of death

Portrait of Monica Bellgran.
Monica Bellgran, professor of production management. Photo: Håkan Lindgren
Published Oct 13, 2021

The project "Production Angels," run by KTH and Södertälje Science Park, helps startups go from idea to production - a phase called "valley of death." With a fresh monetary addition, the project will now expand nationally.

The entrepreneur who’s stuck, wondering how to take his prototype to production, can pick up the phone and call Monica Bellgran , professor of production management at KTH. She is the initiator of the Production Angels program, and together with Södertälje Science Park, she runs an initiative that helps hardware startups to go from idea to production.

”Starting a company in Sweden is one thing - here, there is an abundance of business support and venture capital to access. There is also plenty of support for established companies, like research, education, and national initiatives. But if you have a startup where your product is hardware, there is hardly any support at all in the Swedish innovation system,” says Monica Bellgran.

The name ”Production Angels” alludes to the concept of business angels, but in this context refers to the actual upscaling, when you go from engineer drawing or prototype to series production. It is about helping startups in the critical phase that has been given a respectful nickname due to all difficulties.

”In this phase, which is often called the ’valley of death’, many people close down or sell their idea or company,” says Monica. “It is remarkable that this problem doesn’t gain more attention in Sweden. The state and the companies themselves invest a lot in the startup phase, but when it is time to realize the product, it seems okay that companies disappear abroad or close down. Venture capital, for example, is more inclined to invest in software solutions; they are easier to scale up globally. At the same time, everything needs to be carried by some form of a physical product. Sweden needs both.”

Matchmaking with producers

The startups that show up with a physical product idea in Södertälje get access to, among other things, Production Angel’s coaches and training. They also get help finding local production partners through Digital Matchmaking. The matching is part of the concept and has proven very successful. Startups and Swedish manufacturers meet and end up with concrete deals.

The essential idea of the project is to keep production in Sweden. It creates jobs for smaller manufacturing companies that can grow with the startup companies while the innovations stay in the country. Those who dare the jump over the valley of death often end up manufacturing in China or other low-cost countries. China, for example, has brokers who help Swedish companies find manufacturers in China, something that has been lacking in Sweden. And the notion that production would be substantially cheaper abroad is a misconception, says Monica:

”At first glance, it may seem cheaper to produce abroad. But you do not count on long lead times, quality shortages and communication problems. It is often much faster to design a product for manufacturing with a company in Eskilstuna than a company on the other side of the world.”

Monica also emphasizes the sustainability aspect of the work - there is an excellent opportunity to influence the environment and climate with Swedish producers. Many startups have green innovations and therefore prefer to produce sustainably in Sweden.

”Here we have the opportunity to think sustainably and circularly early in the design phase.”

So far, the Production Angels in Södertälje have worked with about 60 startups and around 15 manufacturers. Recently, the project received a major 2-year grant from Vinnova, and if all goes well, another three funded years await, a message that pleased everyone involved in Södertälje.

”Now we can expand the project. We will create 5-6 nodes across the country near universities and colleges, near incubators and manufacturers. This structure is lacking today in Sweden. ”

The long-term vision is to build "production accelerators" around the country, locations that have prototype labs and low-volume production, with Production Angels as the driving force. In addition, a substantial research effort is needed to develop knowledge in the field. Industrialization and upscaling is an unexplored area.

” We must understand what it is like to be a startup in hardware today, and how manufacturers can meet these companies. We must also include this in our education. Young people today want to work in startups or start a business themselves. Still, we don’t prepare our students for this in our education - at least not how to produce when starting from scratch.”

Problems in the Valley of Death

• Lack of production competence.

• Need for advice and training.

• Difficulties finding a supplier who also wants to produce the first small volumes.

• Difficult and time-consuming to find “soft capital”, which is often conditional.

• Venture capital - is often invested in the early business phase or later, when the volumes already are up. This means less risk for the investor.

Text: Anna Gullers

Facts Production Angels

The concept Production Angels (Produktionsänglar) has been developed jointly by KTH and Södertälje Science Park. The work started in 2017 as a Vinnova pilot within the Production 2030 program (SIP) and has since been developed with funding from Vinnova, the Swedish Agency for Economic and Regional Growth and the Swedish Energy Agency. The program has now received funding from Vinnova to scale up nationally. The program includes coaching, training, matchmaking, networking and the opportunity to present their production case to a panel of production angels.

Do you want to know more?

Contact: Monica Bellgran

Impact ITM:
Page responsible:Wajid Ali Khilji
Belongs to: Sustainable Production Development
Last changed: Oct 13, 2021