Had a very pleasant lunch meeting today in the city of Luleå in the province of Norrbotten in northern Sweden with Matz Engman, CEO of Luleå Business Agency (Luleå Näringsliv) currently busy marketing The Node Pole. Matz has had a multifaceted and intriguing career both as an executive in bigger corporations, as an entrepreneur, and even as a Swedish Elite League hockey referee. He had many stories to tell about the two-year sales cycle from initial contact to Facebook’s official announcement to establish themselves just an hour south of the Arctic Circle. Sounds like a challenging sales job to get one of the most iconic brands of our times up here. Ironically, he said that once they had fine-tuned their sales pitch, it was easier to bring Facebook to Luleå than to get a Stockholm-based company to set up shop way up north!
The sales pitch was largely built upon positive attitude and turning a historic negative into a positive. The cold climate in northern Sweden can indeed be hard to endure through the long and dark winters as I have experienced myself growing up in the municipality of Piteå, an hour south of Luleå. Matz and his team, however, recognized the value of a cold climate and turned it into something cool, pun intended. One of the major costs of running Facebook’s operations is cooling their servers and placing a data center in a cold climate should simply make sense. Matz was sharing how he was planning to market the cool cold up in Norrbotten together with his friend Yngve Bergqvist, the founder of the world-famous Ice Hotel in Jukkasjärvi.
Combine the reduced need for electricity from the cold climate with the abundance of reliable and affordable hydropower developed for the heavy base industries of steel and paper mills, a winning value proposition was beginning to take shape. Matz explained that northern Swedes are taking reliable electricity for granted but when Facebook representatives visited Luleå, the windshield in the car fogged up from the gasping breaths of the astounded Americans who discovered enormous electrical power lines running in parallel to the road they were on.
The people factor was also critical. Not only could Norrbotten offer access to highly-qualified professionals associated with Luleå University of Technology, Matz also got a sense that they managed to establish the key element of trust required for a major corporation to place almost 900 million persons’ private information in their locale. Sweden’s reputation for fairness and stable political situation also was a plus in this regard.
We discussed the sales process through its various phases and the role of the Internet and social media in moving the process forward. In the initial phase, the Internet didn’t play a significant role as more traditional sales and marketing tools were being utilized. The government agency Invest Sweden, headed by Per-Erik Sandlund of Piteå origin, helped facilitate initial meetings in Silicon Valley as it would have been difficult to schedule meetings with major international companies coming from an unknown municipality in a foreign country. If a whole delegation from a country showed up, however, it was another ballgame. Also noteworthy was that the delegation met with at least 15 different companies and that it wasn’t obvious that it would be Facebook that would be the first one to proceed.
The downside for Luleå of being part of a larger country delegation was that they were also accompanied by representatives of other regions in Sweden. An intensive qualification race ensued starting with 22 possible sites, narrowed down to 4 on the short-list, and then with Luleå and Östersund as finalists. One of the trump cards that eventually played out in favor of Luleå was that they had brought with them an executive from the company Luleå Energy already during the initial meetings in Silicon Valley in October 2009. He could not only respond to all specific questions about Facebook’s main concern about the reliability and pricing of electricity, but he could also point out the city of Luleå on a map everytime he got a question. Matz also stressed the key role played by the Mayor of Luleå, Karl Petersén, who with his positive attitude managed to facilitate the process when things looked bleak.
In fact, in the final stages, the whole process was almost derailed when an individual ornitologist appealed Facebook’s building permit by claiming that it threatened a bird species in the area. The Luleå delegation realized that they were in deep trouble when visiting Facebook representatives left for the Luleå airport at a time when there only was a flight scheduled to the city of Östersund. They realized that Facebook was investigating their backup alternative location in case the ornitologist would manage to stall the process sufficiently long to kill the timeline. Matz explained how they then redoubled their efforts to offer daily news updates via the Internet about the local developments at the same time as they had weekly conference calls. In the end, all the authorities and agencies involved all gave the thumbs up to the deal and the pride and joy was apparent when the official announcement was made on October 27, 2011, rendering news coverage all around the world.
When I visited, Matz was busy preparing a Luleå delegation going to California next week on ”The Node Pole Expedition” and apparently they have a Luleå Hockey jersey prepared with the name Zuckerberg playing with number 900, representing the soon to be 900 million virtual new residents of Luleå and Norrbotten! During their trip, they will also build upon the halo effect of securing the Facebook deal to market the larger Norrbotten region, including my hometown of Piteå, to other major corporations in need of cloud computing facilities and data centers. I am looking forward to hopefully catching up with the expedition in California during the tail-end of their trip and also to seeing another major player establish themselves in the beautiful city of Piteå say in 2013!