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Volume 05 | August 2010 Consumer Service 2.0


welcome | content

The partners of Earlybird (from left to right): Wolfgang Seibold, Hendrik Brandis, Christian Nagel, Roland Manger, Rolf Mathies, Thom Rasche

“Welcome to EARLYBIRD Magazine. We want to share our insights on technology segments relevant to our industry, as well as on how Internet-based companies are improving customer service.”

03 _ State of service New Internet-based companies are proving that you can have it all 04 _ Work in progress Mikini’s founders are taking car sharing in Europe to the next level 10 _ Panorama New websites are catering to the active consumer 12 _ Done deal How Tipp24 became Europe’s dominant site for lotteries and games 16 _ Vision Polyvore CEO Sukhinder Singh Cassidy on the importance of engaging consumers 18 _ New kids on the block Yoom promises to revolutionize Germany’s large rental market 22 _ Up close and personal Earlybird Managing Partner Hendrik Brandis 2


STATE OF service | e d i to r i a l

Finally, consumers can have it all

hendrik brandis Managing Partner Munich

Consumer Service 2.0 is about delivering quality, selection, speed, and reasonable prices all at the same time

during the early part of my career, I worked as an aerospace engineer, helping to design planes at Messerschmitt-Bölkow-Blohm in Augsburg. I was fascinated by the precision and intensity of the work; less so by the way delivery deadlines were consistently broken and project budgets overrun. To this day, airlines have to accept delays and cost explosions if they want the latest “flying miracle” from Boeing or Airbus in their fleet. The message is simple: quality and service are neither fast nor cheap. You can’t have it all. For a long time, this message was also the guiding principle in the consumer space. Take grocery shopping. Discounters such as Aldi or Lidl offer very cheap products, but little choice or service. At Fortnum and Mason or Harrod’s Food Halls in London, you can find an amazing assortment of gourmet foods, but you need deep pockets to buy them. Either way, there is a trade-off. In the traditional consumer world, you can have quality, selection, speed, and reasonable prices – just not all at the same time. This edition of Earlybird Magazine, however, is dedicated to people and companies who have overcome this seemingly insurmountable issue. Our first case study, Mikini (pp. 4-9), proves in an impressive way that it is possible to deliver all the above mentioned parameters at once. Operating ride sharing websites all over Europe, Mikini’s German site alone offered 564,317 rides on May 31, 2010. Such a vast number on any given day would have been impossible for a traditional car sharing service, even with hundreds of employees working in a central dispatch. Yet Mikini is run by a handful of people. In order to create a valid business, traditional ride services always had to charge consumers directly; Mikini’s base service is free. The technological tool for such a radical redesign of a business model was, of course, the Internet. But it would not have worked without the engagement of hundreds of thousands of registered users. What started with people writing book reviews on Amazon or selling products on eBay has become a mass phenomenon of consumer activism, which is the focus of our Panorama story on pp. 10-11. More than 15 years after the launch of the World Wide Web, we finally have an environment of transparency where almost every company and consumer in the Western world is online, fostering competition and, above all, giving consumers a mighty voice hitherto unheard. Sukhinder Singh Cassidy believes so much in the potential of this new age that she gave up her well-paid job as a high-ranking executive at Google and joined the fashion platform Polyvore. Read more about her visions on pp. 16-17. At Earlybird, we also believe that there is huge potential in “Consumer Service 2.0”. That’s why we have invested in Yoom (pp. 18-21), a real estate marketplace which enables consumers to bypass the traditional broker. We’re also proud of having invested in one of the early harbingers of this new age: Tipp 24 (pp. 12-15). Launched in 2000, the company quickly became a huge success with its simple twist on the traditional lottery business. We invested €2.6m in Tipp 24, our return was €58m. Sometimes, it can be quite rewarding to be an Earlybird. 3


work in progress

4


CASE STUDY | m i k i n i

Ticket to ride More and more people are taking to the idea of car sharing. Mikini, which operates Europe’s leading online ride share service, is planning on driving the trend forward by M ary L isbeth D ’ A mico

Carola Riedel says she may never take the train again. An administrative assistant at a Munich-based asset management firm, she frequently travels home to her native Leipzig on the weekends. But for the past 18 months, she has been forgoing the train or bus in favor of Mitfahrgelegenheit.de (MFG), an Internet-based ride sharing service that connects drivers offering available seats with passengers willing to share the cost of the trip. “It’s a great thing all around,” says Riedel. “It’s cheaper and more flexible than the train – I can decide spontaneously if I want to go. It’s good for the environment, because people don’t drive separately to the same destination. And although I had my reservations the first time I did it about what kind of people they would be, I have found you generally get to know nice people.” More and more people are thinking like Riedel. Rising transportation costs, financial insecurity, increased environmental awareness, and growing job mobility are all factors driving the interest in ride sharing. For those under 30, there is also a certain social element. And experts feel there is still much more business potential to be mined. According to European Commission data, there are 231.9 million cars on the road in the European Union each carrying an average 1.06 passengers. The average number of kilometers traveled per year is 9,512 km per person. “That’s a total amount of over 2.2 trillion kilometers per year with just one

A greener way to ride: Mikini founders Matthias Siedler, Stefan Weber, and Michael Reinicke (from left to right) are professionalizing car sharing services, which cut back on the number of singlepassenger cars on the road 5


work in progress

Germany mitfahrgelegenheit.de April 2001 Poland carpooling.pl February 2010

United Kingdom rideshare.co.uk August 2010

Czech Republic spolujizda.org coming in Q4/2010

France envoiture.fr May 2010

Austria mitfahrgelegenheit.at August 2001

Spain conduzco.es coming in Q4/2010 Switzerland: mitfahrgelegenheit.ch August 2008

Italy passaggio.it March 2010

Greece pamemazi.gr November 2009

3,600,000

2,529,070 1,946,813 1,317,753

96,193 2002

276,263 2003

500,667 2004

848,033

2005

2006

2007

person in a car. This gives you an idea of the possible economic and ecological impact of ride sharing,” says Matthias Siedler, one of the three founders of Munich-based Mikini, which operates the MFG platform. Germany’s top online ride sharing service, MFG is gearing up to benefit from this potential. It already enables between 10,000 and 30,000 people to find rides daily, transactions valued by Earlybird at more than €200,000 daily, based on the average fares paid by each passenger. Long acceleration period If it were a movie, MFG would be an indie sleeper whose reputation grows slowly rather than a blockbuster sensation. Founded in 2001, the platform began life as an Internet project for Stefan Weber, Michael Reinicke and Matthias Siedler – three modest but hardworking business students at the University of Wuerzburg. Both Siedler and Reinicke had some

Stefan Weber

6

2008

2009

Going international By the end of 2010, Mikini will have expanded its car sharing platforms to 10 countries, including its original German website. In addition to internationalizing the service, the company is in talks with bus, train, and air travel providers in order to establish the portals as go-to sites for last-minute, low-cost transportation offerings. “That’s where the future lies,” says Earlybird Managing Partner Hendrik Brandis, who oversees the investment in Mikini number of arranged rides By the end of its first year of operation, mitfahrgelegenheit.de had arranged close to 100,000 rides. Four years later, it passed the million mark, and last year, it successfully matched some 3.6 million drivers with passengers. That’s based on site traffic in 2009 of 28 million visits and 335 million impressions

programming experience. The three had already been operating wuewowas.de – a portal for the city of Wuerzburg – since 1999. Developing MFG took them about 18 months and was self-funded with 20,000 DM (€10,000). “We spent most of that on creating a logo, flyers, posters and business cards,” says Weber. “The cost of programming the website and the servers was nearly zero, since we did it all ourselves and had some good contacts to the top web design company in Wuerzburg.” Other such platforms already existed, including Mitfahrzentrale.de, which had several advantages over the newcomers: a domain name that came up first in searches and a name linked to a well-known traditional ride sharing firm. But the three felt they could build a better software interface than Mitfahrzentrale. They also chose to make the service free, whereas Mitfahrzentrale required users to phone up a special hotline to get the driver’s number, for which they were charged

BORN: Jan. 30, 1973 NATIONALITY: German FAMILY STATUS: Single EDUCATION: Business Studies (University of Wuerzburg) WATCH: None CAR: Volvo V50 FAVORITE ENTREPRENEUR-ALIVE: Shai Agassi FAVORITE ENTREPRENEUR-ALL TIME: Jeff Bezos


CASE STUDY | m i k i n i

ager. Meanwhile, Reinicke continued his studies in information management and business informatics, all the while keeping an eye on MFG, which continued to attract more users. The Mikini founders met several times a year to discuss issues related to the site, but Reinicke for one was frustrated. At university, he was focused on the new trend of cloud computing, which he wanted to use to improve the site’s real-time capabilities. “There were a lot of new features I wanted to implement, but I knew that if we continued to run it on the side, we would never be successful with it,” Reinicke says. At that time, the company had annual revenues of about €180,000 and an account balance of nearly €80,000 – the sum of all its profits since 2001.

Mitfahrgelegenheit.de began as an Internet project for the founders when they were still at business school. And since the service was free, the name of their platform quickly spread by word of mouth

a fee.The decision was a good one. With its free service, MFG saw its user numbers take off quickly, as its name was passed on purely by word of mouth. One year after it was launched, the site had garnered more than 41,000 registered users and had attracted some advertisers. But come graduation time – Siedler graduated in 1999, Weber in 2001, while Reinicke stayed on to pursue a doctorate – none of the founders saw a professional future in the site. It was the era of the post dot. com hangover, when even the best business ideas were not getting funded, and none of the three could imagine earning his daily bread with the online travel site. “We didn’t see a good business model in it,” concedes Weber. Weber instead joined Yahoo Germany as a product manager, while Siedler co-founded and served as CTO of ComHouse, an ISP and payment company, and then later worked at both Audi and Akamai Technologies as project man-

Matthias Siedler

Puzzle pieces come together MFG continued to grow almost in spite of itself. In 2007, it had more than 600,000 registered users and saw the number grow by more than 35 percent annually. Its volume already dwarfed that of Mitfahrzentrale and numerous others. According to Internet market research company Comscore, for example, MFG saw 374,000 unique visitors in October 2007, compared to Mitfahrzentrale’s 137,000 visitors. When Reinicke was approached by television station ProSiebenSat1 Media in early 2007 with a banner sharing offer – a deal which would provide the site with more stable revenues – he felt it was time to get off the fence. Weber, Reinicke and Siedler were at a turning point: Should they put more effort into the site or let it lie? Reinicke and Weber decided to make a go of it, with Weber joining full-time in March 2007. Under the banner sharing deal, ProSiebenSat1’s online agency, Sevenone, promised to exclusively sell advertising on the MFG site, for which it would get a revenue share on the ad sales and a guaranteed fee, based on the traffic generated. (Weber declines to reveal how much that was.) “The guaranteed numbers gave us the assurance for our self-employment,” says Weber. The two also set out to revamp the software as planned. But it wasn’t until mid-2009 that two more things happened which began to drive MFG forward and enable Siedler, who was married with three children, to join his co-founders on a full-time basis. First, the German automobile club ADAC asked the Mikini founders to develop a ride sharing platform for them to use on their own site, called mitfahrclub.adac.de – an agreement that not only gave Mikini a more steady monthly income, but also the brand backing of the top German automobile club. Secondly came a simultaneous offer for venture capital funding from Earlybird. MFG had come to the attention of Earlybird managing partners Christian Nagel and Hendrik Brandis in 2009 when, in the course of searching for an interesting Internet investment, they found a site that was unknown

BORN: Sept. 23, 1974 NATIONALITY: German FAMILY STATUS: Married, three children EDUCATION: Business Studies (University of Wuerzburg) WATCH: None CAR: Audi A4 Avant FAVORITE ENTREPRENEUR-ALIVE: Martin Winterkorn FAVORITE ENTREPRENEUR-ALL TIME: Akamai Technolgies co-founder Danny Lewin 7


work in progress

Ride share 2.0 Though ride sharing sites look deceptively simple – passengers simply conduct a search of their destination and date and then contact the party in question – the software behind them is complex. They need to be able to portray what’s going on with thousands of transactions in real time. Mikini’s next-generation site, launched in June 2010, provides users with far more than just a chalkboard where they can find one another. “The old site didn’t have much intelligence,” says Siedler, who works with Reinicke on many of the company’s technical aspects. “It used to be that what happened after the two parties met was unknown.” In its 2.0 version, MFG’s software will not only let users book a specific seat to their desired

Michael Reinicke

8

The next-generation MFG platform adds features that allow customers to review drivers and rank them on criteria such as punctuality and cleanliness, for example. The founders believe users are willing to pay a small fee for such services

destination online, but also review and rank different drivers and attributes such as driving behavior, cleanliness, and punctuality, which will be shown in the user’s profile. Similarly, drivers will also be able to report no-show passengers. “This demands more accountability from both sides but means additional security for both drivers and passengers,” says Siedler. The founders believe that users are willing to pay €1.99 a month for these services. The new booking system will be an optional feature that drivers can activate; otherwise use of the site will initially remain free of charge. “The new system needs to established very slowly and with the support of our users,” notes Weber. Further down the road, Mikini plans to develop dynamic ride sharing, in which people already on the road arrange rides via mobile phones or other wireless devices. Part of Earlybird’s vision is to establish Mikini as a site for all forms of low-cost travel. Thus the company is also in talks with Deutsche Bahn and other transportation companies to make revenue-sharing deals, in which they can offer

BORN: March 2, 1976 NATIONALITY: German FAMILY STATUS: Single EDUCATION: Information Systems (University of Wuerzburg) WATCH: iPhone CAR: prefers his Cube LTD Pro bicycle FAVORITE ENTREPRENEUR-ALIVE: Niklas Zennstrom FAVORITE ENTREPRENEUR-ALL TIME: Adi Dassler

Photos: Christian Schmid / www.christianschmid.com

to them, but was ranked by Google as the eighth most visited site in Germany. “They had this huge traffic and something like 15,000 to 20,000 transactions a day were taking place on the site, yet we had never heard of them,” recalls Earlybird managing partner Christian Nagel. “Usually you only have big well-known brands up in the top 20.” Even better, MFG had gained the traffic on its own, without paying money to other sites to advertise its offerings. But the partners quickly saw that company revenues were far too low in relation to the huge traffic they were generating: at that time, they had annual income of around €200,000 with around 15,000 transactions facilitated daily. “All these transactions were taking place, but not being monetized. Money was not really flowing over the platform,” says Nagel. They also noticed that the company was not having to pay to generate the 100,000 hits a day on their site. Not requiring partner sites meant that if a transaction fee were charged, the resulting revenues would be pure profit. Nagel and Brandis were convinced that MFG was sitting on a gold mine – provided they professionalized their platform. They began courting the three founders, who had not really considered venture capital, with their vision for the company. “We helped them see the site’s potential as a top low-cost travel site,” says Nagel. The team was convinced. An investment, they realized, would help them not only revamp the website but internationalize and expand their product portfolio. They actually wanted less money than Earlybird was prepared to offer, partly to keep more control over their company. The firm was prepared to fund them with as much as €3 million, but the initial investment has totaled only €750,000. “It’s pretty unusual for people to refuse money,” says Brandis. The Mikini founders also asked to delay the deal until they completed the ADAC negotiations, but the Earlybird partners wouldn’t go for that. “They said it was now or never,” recalls Siedler, who then joined the team full time shortly after the investment was made in mid-2009.


CASE STUDY | m i k i n i

Bird’s-eye view

hendrik brandis Managing Partner Munich

their low-cost bus, train or airfares via the MFG site. Besides that, the expansion into other European countries has already begun, with websites launched in Austria, Switzerland, Italy, France, Greece, and Poland (see map, p. 6). Spain and the UK are set to follow. All international versions are managed from the Munich office, with full-time country managers, all native speakers, for each market. Mikini’s founders are also in the process of sorting out which founder is responsible for what. There is still no appointed CEO, for example. None of this will be easy, but Reinicke, Weber and Siedler remain, as always, cautiously optimistic. They won’t be doing any rash overexpanding: with 18 people now working for Mikini, the company plans to hire more employees only when the new booking system is up and running, with no immediate plans to open offices outside Germany. Still, the founders firmly believe the time for their idea has come. Says Weber: “It’s exciting to see how user acceptance of the ride sharing concept has radically grown since we first founded the company.”

registered users By the end of its first year, MFG had over 40,000 registered users; this number grew by tens of thousands each year, surpassing the million mark in 2009

The rule of the online marketplace is “winner takes all.” They look set to do that

Mikini wasn’t looking for venture capital when Earlybird made an offer. What drew you to the company? Hendrik Brandis: We were really impressed by the quality of the founders. They are self-starters who have quietly but surely built up the leading marketplace in Europe for low-cost travel. Though they weren’t the first and their platform was not unique, they ultimately outpaced the competition. The rule of the online marketplace is “winner takes all” and they look set to do that. Where exactly do you see the growth opportunities for Mikini? Brandis: We see opportunities both in moving towards a fee-based transaction model and in internationalizing across Europe. MFG is developing a more professional booking system that will provide users with more security. That will enable them to demand a small fee per each transaction. Assuming that Germany makes up 30 percent of the European market, MFG has the potential to grow to well over 100,000 transactions a day. Assuming an average payment of €15 per ride and a 10 percent transaction based fee, the yearly income from ride shares alone could easily exceed €50 million. Internationalization could be tough. They are the market leader in Germany, but what about elsewhere? Brandis: There will be challenges in places like France, where there are already established competitors. And in other countries, low-cost bus routes compete more fiercely with ride sharing. But don’t forget, Mikini already has the highest volume of any such site in Europe.

917.780 41.235 2002

114.024 2003

220.895 2004

347.868 2005

493.687 2006

1.148.531

662.614 2007

2008

2009

9


Panorama

Rise of the active consumer The digital equivalent of the suggestion box, websites that gather feedback or let consumers drive business decisions are the ultimate proof that the customer is indeed king by karsten lemm

The little devil makes it hard to resist: “Come to the dark side,” it says with a tempting smile, “we have cookies.” On most days, someone somewhere around the world gives in to the temptation – and clicks the buy button. “It’s one of my top sellers,” says Pam Gobiel, owner of “T-Shirt Fun,” an online boutique offering a vast array of humorous designs. While her customers browse a selection of hundreds of different shirts, Gobiel keeps coming up with new ideas for future bestsellers. Unlike designers who run brick-and-mortar stores, the 44-year old Bostonian does not waste a minute dealing with things such as order fulfillment, warehousing, and logistics. “That’s the great part,” Gobiel says, “all I have to do is design, and Zazzle takes care of the rest.” San Francisco-based Zazzle is one of a growing number of online retailers catering to a new breed of consumer-creators – people who do not only come to shop but also to dream up products of their own, with the prospect of selling them to others. At Etsy and Artful Home, for example, hobbyists present a wide range of self-made goods, from Japanese rice soap to artisan pottery. Budding authors try their luck at Cafepress, Blurb and Lulu, websites that allow everyone to publish and sell their own books. Internet photo agencies like iStockphoto and Imagepoint, meanwhile, tap into the vast sea of pictures taken

by talented amateur photographers, selling them at a fraction of the cost that traditional photo agencies demand. Creator economy “We’re seeing the shape of a new economy,” says Stanford professor and renowned futurist Paul Saffo. While the industrial revolution gave us mass production and the postWorld War II economy revolved around “how to inflame consumer desires,” Saffo now detects signs of an entirely new era: “We are entering an age in which the central economic actor is someone who both produces and consumes at the same time. It’s a creator economy.” The Internet and social media are key, as they allow for instant feedback and new forms of customer interaction. When Amazon invited shoppers to leave comments about the products on its virtual shelves, the online superstore turned formerly passive customers into active participants in the sales process. The reviews provide shoppers with insights from others who previously purchased, and help Amazon give feedback to its suppliers. “To allow reviews was a big step a few years ago,” says Josh Bernoff, senior vice president of idea development at Forrester Research. “But by now it’s been definite-

Whether searching for a job, a partner, or a great deal on any product imaginable, consumers turn to the Web as their first port of call. And that means there’s an ever-present incentive for companies to improve their online services 10

As long as the Internet has been around, it’s been used for flirting. The first dating portals kiss.com and match. com were founded in 1994/95 by web pioneer Gary Kremen

To increase trust in its online auction portal, Ebay introduced an evaluation system in 1996 for buyers and sellers to rate transactions – a core element of social commerce today

A simple worldwide payment method for online transactions: that was the goal of PayPal when it launched in 1998. Buyers also had protection from unauthorized or faulty transactions

In the late 1990s, companies began introducing online tickets, among them, Deutsche Bahn, which first offered this service in October 1999 in conjunction with a special travel offer

Illustration: Sabrina Müller; Photos: DFKI GmbH

Improving customer service via the Web


OVERVIEW | ac t i v e c o n s u m e r s

ly proven that sales increase because people develop confidence and trust.” Consequently, shopping with a little help from a million online friends has become ubiquitous: travelers book hotel rooms based on recommendations at Tripadvisor, film fans consult the Internet Movie Database before heading to the cinema, and services like Yelp and Qype present user reviews on anything from local restaurants to day-care centers. Web services have begun to tap into this active consumer base for more than just opinions. French startup MyFab sells designer furniture at a fraction of traditional cost with its direct-to-consumer business. Instead of stocking up on tables and sofas that have already been made, MyFab first collects orders, then has the products manufactured and shipped to the customer’s doorstep – no warehousing or retail stores required. The price is patience: it can take up to three months for the furniture to arrive. But the reward is savings of 50 to 80 percent on comparable products. Consumer as designer For companies, turning directly to consumers has become both a marketing tool and an opportunity for innovation. Some, like Starbucks, actively reach out to their fan base and ask for new product ideas; others invite shoppers to make products to their own liking. Each of the big sports apparel makers – Adidas, Nike, and Puma – have launched websites that turn joggers into designers. With a few mouse clicks, prospective buyers can choose from a variety of colors and patterns for their running shoes, which are ultimately made to order. “Participation is the new brand loyalty,” says Yves Béhar, founder of design studio Fuseproject. The Swiss-born designer, whose clients include Herman Miller, Birkenstock and Google, envisions a world of close cooperation between professional creators and armchair consultants. “This is not a

In 2000, Adidas gave customers a service that was previously restricted to top athletes. With Miadidas, they could custom design their own sports shoes for performance and style

In July 2004, Matt Rutledge, a pioneer of the one-deal-a-day e-commerce model, launched Woot, which offers customers a different product each day at a discounted price

way to replace designers and engineers,” he says. Instead, Béhar sees a chance to foster the dialogue with consumers who can finally tell companies “what they actually want rather than what the marketing department believes they want.” To some, the changing dynamics, dramatic as they may seem, constitute little more than a shift in emphasis. “Companies have been asking for 100 years what features should be in their products,” says Kent Grayson, marketing professor at the Kellogg School of Management in Evanston, Illinois. “The difference is the speed of feedback. What we’re now talking about is real-time market research.” It sounds tempting, but it’s not without dangers, says Grayson. Professional market research companies, he points out, carefully select focus groups and try to vet answers for sampling errors. “On the Internet, you’re not sure who’s responding.” Such concerns matter little to customer-creators like Pam Gobiel. Four years after setting up shop on Zazzle, the former hobby designer is now a professional t-shirt vendor. Her revenue – a few percent commission on top of Zazzle’s own price for each item – has grown to the point where her husband has given up his construction business to help run “TShirt Fun” instead. Success on that scale is not the norm, however. “We have thousands of people who make good money,” says Jason Kang, Zazzle’s vice president of marketing. But while some earn more than $100,000 per year, there are only a handful who manage to turn Zazzle into a living. “This is not a quick and easy way to make money,” cautions Kang. “Like any other business, it’s hard work.” But it has its perks. While Gobiel takes care to monitor customer trends, optimize her store for search engine keywords, and promote her work via Twitter and Facebook, she can also allow herself the luxury of an extended vacation. “And it’s nice to know that the money still keeps coming in,” she says. Next up is a cross-country drive in an RV that she and her husband recently bought. Paid for by a little devil and a number of Gobiel’s other successful designs.

On June 28, 2005, Amazon patented its technology for generating product recommendations based on customers’ purchase history and their prior use of the site

Since 2006, online service Weblin has allowed consumers to create their own avatars with which to explore the Web. Should different avatars happen to meet, they can communicate

Turning the job application process on its head, German website Absolventa allows young job hunters to enter their details, and then wait for interested companies to contact them 11


done deal

Betting on a sure thing Tipp24 began by bringing the German lottery into the Internet age. It has grown into Europe’s dominant website for lotteries and games, despite fateful regulations that forced the company to radically change course by W illiam B oston

The first thing you noa lawyer. “We spent a lot of time totice when Jens Schumann walks ingether as students and we were conto the room is his tan, the kind of stantly trying things out, building ruddy tan you get from being out at websites and experimenting,” resea. He appears so relaxed that it is calls Schumann, leaning back in a hard to imagine him 10 years earlichair in the company’s spacious, er, putting in exhausting days as he glass-walled conference room. built his company. “I’ve been sailing,” he says, “getting my sailing liThe search begins Tipp24 still has its headquarters in Hamburg, despite One evening, the duo atcense; something I’ve always wantthe fact that a recent German law forced it to transfer tended a gathering of the local Ined to do but never had the time for.” its core operations to the UK, Spain, and Italy Time is something Schuternet scene, where they met somemann now has in abundance. At 37, he has come full circle. In one from Icon Medialab. As chance would have it, both were 1999, Schumann and his friend Marc Peters hit on an idea for offered jobs to join the company in Hamburg. During the day, an Internet start-up. It was the height of the dot.com boom, an they worked at Icon, but after work, Schumann and Peters era, Schumann recalls, when “two guys and a 60-page busi- would often hang out at a local Greek restaurant, huddled beness plan” could get millions from venture capitalists eager tween salads and beer and the blue shimmer of their laptop to find the next big thing before anyone else beat them to it. screen, batting around ideas for a company of their own. They The idea was to create an online lottery retailer, sparing lot- created a master list of must-haves to make a business idea to tery players the trouble of going to the corner store to buy their work on the Internet. It must generate commission income tickets. But it wasn’t only about convenience. Tipp24, as the and not depend solely on advertising. There must already be company came to be called, modernized Germany’s state lot- a large market for the service. The service must add value. Altery system, making it more secure for the players, and making so important: there must be no inventory and it must obey the it easier for winners to retrieve their prizes. truism that you can’t force customers to change their behavWithin a few years, Schumann and his colleagues ior. “Every time we had an idea, we’d run it through our list,” turned the company into the dominant European site for online says Schumann. “Every idea failed to clear one of the hurdles.” This went on for several months until Peters had an lotteries and games, and navigated the usual arc from start-up to stock market listing. In September last year, Schumann left interesting conversation with an acquaintance about how the the company in which he invested a decade of his life to take lottery was getting ready to go online, and how Germany some time off, close a chapter, and plot his next moves. was home to a €10 billion market for lottery tickets. Bingo! Schumann and Peters met at university, where they Schumann and Peters ran the lottery idea through their list. It studied law and business respectively. But Schumann was more cleared every hurdle. They could earn money on the commiscaptivated by the Internet hype than the thought of working as sion from Germany’s state lottery companies. They wouldn’t

Jens schumann

12

Born: June 6, 1973 Nationality: German Family Status: Engaged Education: Law (University of Muenster) Watch: IWC Portuguesa Car: Porsche 911 Cabrio Favorite Entrepreneur – Alive: Steve Jobs Favorite Entrepreneur – All time: Fathers of the German “Wirtschaftswunder”


CASE STUDY | t i p p 2 4

A lawyer by training, Jens Schumann found himself intrigued by the hype surrounding Internet start-ups at the end of the 1990s. But he and his business partner were determined to wait until the right idea came along

13


done deal

REVENUE Tipp24 went live in 2000 and had its first profitable year in 2002. Profits grew steadily each successive year, but they really took off in 2009 with the new business model operated by MyLotto24, in which Tipp24 has a minority holding 2000 2001

€ 0.69m / € -5.36m € 3.81m / € -3.17m

2002

€ 8.28m / € 1.02m

2003

€ 14.08m / € 1m

2004

€ 19.51m / € 3.21m

2005 2006

€ 26.12m / € 6.05m € 34.58m / € 7.25m

2007

€ 44.97m / € 8.95m

2008

€ 45.84m / € 8.89m

2009

€ 89.55m / € 23.05m

operating result In 2009, Tipp 24 reported earnings before interest and tax (EBIT) of €23 million on sales of €89.5 million, a margin of nearly 26 percent. That was a year after a German legal ruling forced the company to abandon its core business

Game-changing decision It took a while for Tipp24 to gain traction. The site went live in February 2000, but it took a full year for the Hamburg state lottery to enable an electronic link with Tipp24. Until then, Schumann and his team would print out lottery tickets bought by their customers online and carry them to a local lottery booth to feed them into the system. After Hamburg, the remaining lottery companies also hooked up with Tipp24. In December 2001, the company reported its first profitable

Bold move rewarded By the end of July, they were only speaking to a few venture capitalists, who would always send them away with requests for changes to their still-evolving business plan. One

employee growth Tipp24’s ranks steadily swelled until 2008, when online sales of lottery tickets became illegal in Germany, meaning the company had to downsize in 2009 14

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Photos: Christian Schmid / www.christianschmid.com

of the VCs they were talking to was Earlybird. They met regularly with Earlybird representatives Hans Cornehl, now Tipp24 CEO, and Christian Nagel. At the beginning of September, Cornehl and Nagel offered to back the idea and told them to go home and think about it. “They probably thought they’d never see us again,” quips Schumann. Nagel and Cornehl were, in fact, quite impressed with the young men and felt they had developed a solid business model. “Not even the best business plan helps if the people aren’t able or willing to transform it into a real business,” says Cornehl. “Their enthusiasm and readiness to do that was exciting. My later decision to join the company was based in part on the strong personal bond we built.” The next day, Schumann and Peters quit their jobs. “Nearly three months to the day after finishing our business plan, we received €2.6 million,” says Schumann, still proud of the achievement. “At the end of the day, it was just for two guys and 60 pages of paper. Pretty courageous.”

require the players to change anything except the channel – instead of walking down to the local newsstand, they would buy tickets online. And there would be no inventory to suck up profits through warehousing and distribution costs. “The added value was the real killer,” says Schumann. “As much as 40 percent of lottery winnings never get claimed because people lose their tickets or don’t know they won. An online lottery system means every winner is known and gets his prize.” Things began to move quickly. In the summer of 1999, Schumann and Peters often spent their lunch breaks on the banks of Hamburg’s Alster River, working on their business plan. After three or four weeks, it was still far from finished, but time was pressing and they decided to start looking for money. When they began meeting investors, they often had to leave work during business hours. In order not to raise suspicion, they would never leave at exactly the same time and would always drive away in separate cars. They’d meet at Schumann’s apartment, where they would quickly slip into business suits, and then drive off together to meet potential investors. Afterward, the whole routine was done in reverse, and they would show up again at work in jeans and t-shirts, their secret still safe.


CASE STUDY | t i p p 2 4

Cut-throat: the contemporary paintings in Tipp24’s conference room prove business is about survival of the fittest

month, and 2002 was its first profitable year. Tipp24 became so successful that the state lottery companies not only willingly cooperated, but in 2004, when Earlybird was ready to cash out, a group of state lotteries agreed to buy the company outright. The plan was blocked on competition grounds by Germany’s anti-trust watchdog, the Federal Cartel Office. And so in 2005, Tipp24 went public. Schumann and Peters each earned €4.4 million on the listing and continue to hold over 10 and 8 percent, respectively, of the company which is worth around €200 million today. Over the years, Tipp24’s business has changed, and not always voluntarily. The company expanded abroad, branching off into Spain in 2002 and Italy the following year. But in 2008, the game completely changed. Germany created a law to fight gambling addiction, which among other things, outlawed any form of online lottery. Schumann’s legal training stood him in good stead during three years of lobbying, trying to stop Germany from destroying his business. In the end, he fought the law, and the law won. Tipp24 sold most of its activities to do with brokering lottery products to a minority holding in the UK called MyLotto24 and its subsidiaries, where players bet on the outcome of European lotteries. Bouncing back Ironically, the loss of its core business in Germany was a boon for the company. Instead of selling German lottery tickets at a small commission of about 13 percent per ticket, it was earning 50 percent on every €10 lottery ticket sold, had lower overheads, and higher profits. The company’s shares soared, rising 425 percent in 2009. “They managed the transition very well,” says Marcus Sander, an analyst with Macquarie Securities Group in Frankfurt. “But there is more risk and greater volatility now because they have to pay out when someone hits the jackpot.” The result of last year’s transition is that all but a few of the employees that once filled Tipp24’s Hamburg headquarters had to be laid off as core operations were transferred to the UK, Spain and Italy. Schumann saved the company, but as he talks, you get the feeling that he doesn’t feel like it’s the same company he and Peters founded a decade ago. Schumann wants whatever he does next to be a hands-on challenge, such as restructuring a company. But for now, he appears happy to just have time. Time to himself to learn how to sail, to play golf with his fiancée, to refocus. “This year, I’m just going to do the things that I never had time for in the past 10 years and not think about what happens next.”

Brokered Betting Volume Tipp24 boosted its brokered betting volume considerably with its 2002 expansion to Spain, and again in 2003 with a subsidiary in Italy. Billings peaked in 2007 with a total betting volume of almost €350 million

375m 300m 225m 150m 75m 0m

Bird’s-eye view

christian nagel Managing Partner Hamburg

There were a number of holes to fill in the business plan, but the idea was brilliant

What was your first impression of the business plan presented to you by Jens Schumann and Marc Peters? Christian Nagel: The plan was not 100 percent fundable at the time. There were a number of holes to fill. The idea was brilliant, but it was very early. It was obvious that we needed a bigger team and would have to add financial experience at some point. Were you surprised when they actually took your offer? Nagel: Well, we were tough negotiators. We made it clear that they could get money from us, but it wouldn’t be cheap. After all, we brought a lot of experience to the table, and it was our goal to actively support them so that they could then carry on without us. But we were interested and optimistic. What role did confidence in the people play as you made your decision? Nagel: In the early stage, people are always the most important point. We thought there was a good combination of creativity in Marc’s knowledge of online marketing and Jens’ solid legal background, which turned out to be so critical. How has the start-up environment changed since the dot.com era? Nagel: It has changed dramatically. Jens and Marc were typical of the founder teams of the time. They weren’t repeat entrepreneurs and didn’t have experience in founding businesses. Today we see a lot of repeat entrepreneurs and very experienced teams. What was your return on Tipp24? Nagel: We invested €2.6 million and our return was 22 times our investment, €58 million.

€ 346,8m

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15


VISION

Consumer power no passing fashion Former Google executive Sukhinder Singh Cassidy became CEO of Polyvore, a social network for fashionistas, after being intrigued at how the site engages consumers, melding commerce with fun tools for self-expression

by karsten lemm

est fashion community on the Web where users help other users express, discover and share style ideas. As a company, we sit at the intersection of both media and commerce, and there are changes in both arenas that make something like Polyvore possible today. What changes are you thinking of? Singh: Internet 1.0 was about crawling the Web for hard goods and helping people compare them objectively. Then you look at 2.0 and the rise of Amazon, eBay, Zappos – they all thrived

Sukhinder Singh Cassidy joined Polyvore as CEO in March 2010. Prior to that, she was a CEO-in-residence at Accel Partners. From 2003 to 2009, she held various executive positions at Google, including overseeing its Asia Pacific and Latin American operations. Polyvore is a leading fashion and social shopping platform, where users can indulge their styling fantasies, mixing and matching clothes and accessories from any online store to create and publish their own looks. Cassidy participates on Polyvore under the name “Sukkie2008” 16

Photo: Karsten Lemm

When you pick what to wear, do you first go to Polyvore? Sukhinder Singh: Not on this outfit today, but I do use Polyvore increasingly as a way for me to think about what goes together. Basically, you can discover styles that you like from other people, and you can express your own. Beyond fun and games, what is Polyvore’s purpose as a business? Singh: Essentially Polyvore stands for user-discovery at massive scale, and fun is an important part of that. We’re the larg-


Interview | s u k h i n d e r s i n g h

on value propositions suitable to commerce, for example great Online local services are still mostly service oriented, focused customer service and extensive selection. Commerce 3.0 is on how to get you to your local coffee shop. But there must first of all about bringing an experience back to shopping. You be a way to map location and the social graph on top of soft goods. It’s nice that you can see something online and buy on may buy along the way, but first of all it’s an experience. the Web. But I really want to be able to take a picture of someHow do you earn money with an experience? Singh: It’s a combination of advertising and commerce. For thing I like with my smartphone, upload it to Polyvore and figexample, we run contests, four or five per week, and the major- ure out what goes with it. ity are sponsored. Tacori, for example, wanted to create excite- And get real-time feedback from your friends? ment around a new line of jewelry and ran a contest in which Singh: Yes, why not? Maybe there’s a friend around the corsome 2,000 people participated – creating hundreds of thou- ner who comes by, or maybe they just text me back that they sands of page views on Polyvore but also on blogs, Twitter, Fa- like the set. And that causes me to buy the item in the store that cebook and other sites. It’s viral marketing through engage- I previously wouldn’t have bought because I didn’t know what ment, an example of how new-generation media sites with a it would go with. Perfect example. How can companies benefit from making users their partners? social component bring brands into connection with users. Singh: There are multiple ways. Take user advocacy – you can In addition, you make money with transactions? Singh: We have an affiliate agreement with a number of retail- spend millions to try and figure out what your brand message ers, and we get paid if we refer users to them. Of our 7 million should be, or you can just ask your best users. User feedback visitors, about 200,000 are active creators, generating some is similar: Modcloth, for example, has a service called “Be the 30,000 new sets per day. So the vast majority come to browse buyer” where they put out samples from designers, and users get to vote. Whatever wins gets produced. In and shop, and we drive a lot of transactionthe process, Modcloth uses this information al revenue. But we never send traffic only “Customers to give designers real-time feedback on how to places when we get paid. If you look at a Polyvore set, you see all of these links – some have found their voice much of an item they should produce. It creates shorter product life-cycles and more efof the retailers have affiliate programs, others on the Internet and ficiency. You can guess what people want to don’t. We don’t distinguish. they’re going to use it, buy and blindly produce massive quantities, That sounds a bit like, “We all benefit by beor you can take this feedback and base your ing open and collaborative.” so you might as manufacturing cycles on it. Singh: That’s probably a bit too generous. well engage in the How do social platforms fit in? It’s more about what Google, Apple and othconversation” Singh: For us, user-to-user interaction is the ers have shown: your best results come from entire system, but I could certainly see a way keeping the consumer experience front and center. There are many companies that have adopted that the- for any company in America to incorporate that concept. Take sis, of which we are one. What makes Polyvore addictive is “like” buttons as an example – it’s one user indicating an opinthat we focus on creator and shopper delight. To move away ion that other users will benefit from seeing. I think the notion that the most trusted, authentic voice may well come from othfrom that for direct monetization seems a risky proposition. er users, the notion of recommendations from your own social Why are users willing to do all of this work for free and help a graph, is becoming very important. company like Polyvore create a business with their effort? Singh: One of our founders said: if you want to build any kind Where do you see pitfalls? of consumer service you have to figure out how to appeal to a Singh: You have to be prepared to listen to what your custombasic human need. For us, it’s self-expression, empowerment, ers have to say. One of the biggest concerns, I imagine, for and fun. You can create a beautiful set and people leave hun- a company used to having tight control over its brand is they dreds of “like” comments. Everybody has some sense of who hear a message they’re not necessarily interested in hearing. they are, who they want to be, and clothing, art, and home ac- But even if you think that your brand is entirely in your concessories are ways to express that. So you’re tapping into some- trol, I’d say we now live in a world of such information transthing that people naturally want to do and already spend a lot of parency that that’s no longer the case. Customers have found their voice on the Internet, and they’re going to use it. You can time doing. We’re just giving them a very simple new tool. choose not to participate, but it’s being said anyway, and it’s If social shopping is Commerce 3.0, what’s next? Singh: One of many possibilities is social shopping, both for being said pretty publicly. So you might as well engage in the soft and hard goods, combined with location-based services. conversation and use it as an opportunity.

On Polyvore, the looks created by users are known as “sets.” Community members create more than 30,000 sets each day, spending an average of 10 minutes on the site per visit, and helping to drive sales of trendy items 17


new kids on the block

Fueled by his own outrage over high broker fees, Malte Niebuhr (right) conceived Yoom. Next to him is his business partner, Jan Hendrik von Ahlen

Getting rid of the middle man For would-be tenants in Germany, Internet start-up Yoom aims to make high real estate agent commissions a thing of the past. It could dramatically alter the country’s rental market landscape. by kyle james

Malte Niebuhr

18

Birthday: Nov. 24, 1976 Nationality: German Family Status: Married, one child Education: Business Administration (University of Cologne, University of Hamburg) Watch: Swatch Car: BMW Favorite Entrepreneur – alive: Mark Zuckerberg Favorite Entrepreneur – all time: Henry Ford


CASE STUDY | yo o m

Yoom is hoping to appeal to Germany’s large market of renters with posters such as this one, which uses a play on the word “ausziehen,” which can mean “move out” or, alternatively, “undress”

Malte Niebuhr felt like he had been ripped off. Two years ago, the then 31-year-old Hamburg native wanted to move into a new apartment. Through a management company, he found one he liked. But before he could sign on the dotted line, the company referred him to a real estate agent, who demanded a high commission before she would give him the keys. It didn’t seem right, he thought, since she had actually done very little. He handed over the money, but it left a bad taste in his mouth. “You have to question whether unlocking an apartment door or taking a couple of documents from you and giving them to a landlord is really worth a commission of €1,500 - 2,000,” Niebuhr says. “It’s just absurd and it shows how people looking for apartments here are exploited.” Every year in Germany, around 9 million people move to another apartment or house; real estate agents broker an average 1.4 million property units annually. Agents typically take a commission of two months’ rent plus VAT. And they’re not exactly beloved by the population at large. German Internet forums on real estate are full of bitter invective about agents and the fees they charge. Terms like “highway robbery” or “rip-off” pop up often. After forking out for his own broker’s fee, Niebuhr didn’t just sit and stew; he channeled his anger straight into a new company whose goal is to help renters keep a little more of their hard-earned cash. His startup is the Internet platform Yoom, which was founded in June 2008 and went live last December. It combines a conventional real estate listings site with an online auction site akin to eBay. Renters wanting to move

Jan Hendrik von Ahlen

can post a listing for free, and apartment hunters can browse the listings, see photos, and set up appointments to view properties. The difference with Yoom is that, once apartment hunters find a flat they like, they bypass the broker. Instead, they enter a bidding process, the proceeds of which are shared by the current tenant and Yoom. “We’re offering a marketplace for current and future renters, who both come out ahead,” says Niebuhr (see “How Yoom works,” p. 20). Bye bye broker The one group that stands to gain nothing from Yoom’s service are estate agents. But most people who rent aren’t likely to be too cut up about this exclusion. Aric Austin is one such person. An entrepreneur who runs his own web-based business, Austin moved to Berlin from Munich with his girlfriend in February. It took them almost four months to find an apartment, because they were determined not to pay to a broker’s fee, which made the search much more difficult. “I just couldn’t live with going through an agent, since the service they provide is so crappy and the costs so high,” he said. “I always say, if you want to make a lot of money easily in Germany, just become a real estate agent.” According to Niebuhr, German brokers are paid €2.3 billion annually. His goal is nothing less than to redirect a good portion of that money to tenants – and to Yoom. “In the end, the agent will become superfluous,” he says. Yoom represents Niebuhr’s debut as an entrepreneur, but he says he’s already hooked. As a business student in college, running his

Birthday: Jan. 17, 1974 Nationality: German Family Status: Single Education: Business Administration (Syracuse University) Watch: Swatch Car: Porsche Favorite Entrepreneur – alive: Oliver Samwer Favorite Entrepreneur – all time: Oliver Samwer 19


new kids on the block

own show had always been in the back of his mind, but after getting his degree and doing an apprenticeship at a bank, he went to work for his parents, who were in real estate. He learned the ins and outs of the business, even working as a broker himself for about six months just to get a taste of the system. After his first-hand experience of having to pay a broker’s fee, the idea for Yoom germinated. In the meantime, Niebuhr decided to seek out expertise, a search that lead him back to the sandbox and a good childhood friend. In kindergarten, Niebuhr had dug sand with and occasionally stolen wooden blocks from the von Ahlen brothers, children of friends of his parents. Years later, Jan Hendrik von Ahlen helped found JobLeads, an Hamburg-based online headhunter specializing in executive and professional placements. Von Ahlen knew about forming a new business and had the needed know-how when it came to creating an Internet platform. Then, of course, there was the personal connection. “It’s great to be able to do something like this with close friends,” Niebuhr says. After the men finished their business plan in June 2008, the company got €100,000 in seed financing from angel investors in spring 2009 and then secured additional funding of over a million euros from Earlybird a year later. The new funding is aimed at helping the company achieve more traction after their market entry last December. “The potential of this model is so great, the benefits so obvious, and the idea’s reception by everyone we talk to so positive that we think it’s a very good bet,” says Christian Nagel, the managing partner at Earlybird who oversees the investment in Yoom.

registered users Yoom’s managers have been buoyed by the steadily increasing traffic on the site in the first six months. Each month brings about 1,000 new registered users 20

Von Ahlen, who is now CTO, says the site is picking up more and more traffic. About 1,000 new users register on the site every month and he records around 40,000 page impressions per week. “We’re working hard on explaining our business model very clearly and simply to people,” he says. So far, the company has listed around 275 properties, spread out over 10 cities but concentrated in major cities such as Hamburg, Munich and Cologne. The short-term goal is to have at least 100 properties in each city to estab-

3051 815 January 2010

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Photos: Christian Schmid / www.christianschmid.com

Making it grow During the first six months of the business, the focus at Yoom was mainly on the legal aspects of the new endeavor as well as designing the website. Now that the platform has been running for six months, the priority for the 10 permanent employees and four freelancers is getting the word out to a wider public. Of course, there are also constant refinements to the site and the occasional tweak to the business model. For example, Niebuhr had originally planned that Yoom would take a 25 percent commission from the successful rental bid. “But then we thought that might seem too high to people, so now we’re testing the 10 percent level,” Niebuhr says. So far, the company has done limited marketing trials – local cinema ads, flyers distributed by promotion teams at group apartment viewings. The first transaction (€600, of which €60 went to Yoom) was completed on Jan. 9, 2010; by mid-year, around 35 transactions had been facilitated. Now the company is at work on a new marketing plan, one that combines online ads and a presence on social media sites with more traditional methods, such as billboards and TV spots.

How Yoom works A tenant named Astrid is moving out of her flat that rents for €1,500 a month. She has a refrigerator and microwave oven which she doesn’t want to take with her. She posts her flat for free on Yoom, and an upper bid limit of €1,000 is estimated for her appliances and moving costs. She gets bids from interested parties, who upload documents such as application forms and proof of income to Yoom. At the end of the bidding period, there are two bids for €500, one for €600 and two for €750. She passes on information about the two highest bidders to her landlord, Bernd, who makes the final decision about who gets the flat. He chooses Carsten, who has to pay the €750 he offered in his bid. Ten percent of that goes to Yoom, and the rest goes to Astrid. Carsten saves €2,820. Had he used a broker, the commission alone would have been €3,570 (two months’ rent plus VAT)


CASE STUDY | yo o m

Bird’s-eye view

christian nagel Managing Partner Hamburg

Yoom is working on a new marketing plan which clearly explains its business model to potential customers. Online ads, billboards, and TV spots are all part of the mix

Yoom has the potential to be a disruptive innovation. It’s a very good bet

lish a firm presence there. Long-term, the sky’s the limit. The partners are already working on concepts for new monetization avenues: partnerships with moving companies, insurers, and utilities, for example. An array of simple online solutions to people’s moving needs could soon be in the pipeline. “Our business model is easy to expand upon,” says von Ahlen. “Just because we are focusing on the rental sector now doesn’t mean we might not move into property sales at some point. There are few limits, but we’re taking it one step at a time.”

Apartment Listings During its first six months of operation, listings climbed gradually. Yoom’s success will depend on gaining a critical mass of listings; the company’s short-term goal is 100 property listings in each of Germany’s major cities

January 2010 February 2010

33 50

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April 2010 May 2010 June 2010 

What did Earlybird find interesting about the Yoom idea? Christian Nagel: We like to look at companies that break apart existing economic chains, so-called disintermediation, or taking out the middleman. We’ve made several investments of this kinds in the past and they’ve been successful. Here, the agent is taken out of the rental process. Why do you have confidence in Yoom’s business model? Nagel: I have a great deal of faith in the customer service aspect of their idea and in its potential as a disruptive innovation that can take out a party from the rental process who is simply not needed. There are risks, certainly, especially when it comes to getting a foot in the market at the beginning and building up share. But the potential of this model is so great that we think it’s a very good bet. Do landlords benefit as well? Nagel: Yes. The documents the landlord gets from clients can be standardized and thus clearer. And if current renters know that they can make money from new renters through Yoom, they have an extra incentive to keep their flats in good condition. That’s good for the landlord, of course. Yoom’s Malte Niebuhr is a young firsttime entrepreneur. What impressed you about him? Nagel: He’s a very good salesman. He knows what he wants and how to make it happen. I was impressed by his attempts to get to know the market he wanted to work in. He actually worked for a while as a broker himself and saw how the process functioned. I think he’s got the entrepreneurial spirit in his blood.

147 218 350 21


up close and personal | h e n d r i k b r a n d i s

The family guy Earlybird Managing Partner Hendrik Brandis has had a colorful career. And as father and step-father to eight children, his family life is no doubt equally exciting

Hendrik Brandis after winning “Les Voiles de Saint Tropez” regatta for the first time. The “Earlybird” beat out 45 yachts in its class

hendrik brandis

22

Tell us your life’s motto in one sentence. Hendrik Brandis: Not trying is the biggest reason for failure. Which talent would you most like to have? Brandis: I would love to be musical. I never learned to play an instrument. To be honest, I fear that my attempts would have only limited success, as I regard my melodic talent as rather poor. But who knows, maybe one day I will give it a shot and start practicing the piano. What’s the most memorable thing you ever did or received that didn’t cost any money? Brandis: The birth of my four children. My oldest, Frederik, was born in 1992. The girls, Sophia and Carlota, followed in 1994 and 1997 respectively. Our youngest, Caspar, joined the family in 2009. If you could be reborn as an animal, what would you be and why? Brandis: Definitely as an elephant, because elephants have almost no natural enemies and they have time – the scarcest resource. They live longer than most human beings, at least in the natural circle of life. If you could take one year off to help solve one of the globe’s major problems, which cause would you devote your time to? Brandis: I would dedicate my time to a project to fight illiteracy, as I regard the lack of education as one of the key drivers for most of the major problems in our world. Given my set of talents, I would focus on fundraising and organizing teachers, and not necessarily do the teaching myself. I visited such a school project in Namibia which has been set up by a German after a successful business career in Germany, and I really admire what he has achieved. He created elementary and secondary schools, as well as training schools where people can get qualifications to work as a baker, butcher or hotel manager, for example. If you could have one day without any private or professional obligations, what would you do? Brandis: I would go sailing with my entire family, maybe in Majorca or somewhere in Italy. I wouldn’t mind too much about the location, as long as it was sunny and windy. Given that we live in Bavaria and we only have one day, I guess we’d have to beam ourselves to the right place in order to make the most of the given free time (laughs).

Born: Oct. 18, 1963 Nationality: German Family Status: Married, four children and four step-children Education: Aerospace Engineering (Technical University Munich) Watch: Longines from 1948 Car: VW Bus, Porsche 911 Favorite Entrepreneur – Alive: Steve Jobs Favorite Entrepreneur – All time: Jakob Fugger


Did you know that: Compared to the United States, venture-backed companies in Europe have delivered twice as many “home run exits,” bringing returns of at least 10 times the amount invested

Earlybird Magazine Editor-in-Chief: Hendrik Brandis; Earlybird Project Team: Daniela von Wedel, Dr. Marion Jung Editorial & Design: Ambo Media Ltd.; Managing Editor: Deanne Corbett; Contributing Authors: Mary Lisbeth D’Amico, William Boston, Kyle James, Karsten Lemm; Researcher: Peggy Hoyer; Art Directors: Andreas Volleritsch, Michaela Pernegger, Neubau Editorial Design Project Supervision: Dr. Thomas Clark; Litho & Print: Druckerei Kriechbaumer, Munich Earlybird Venture Capital GmbH & Co. KG; Van-der-Smissen-Str. 3; 22767 Hamburg, Germany Tel: +49-40-43 29 41-0; Fax: +49-40-43 29 41-29, E-Mail: info@earlybird.com (responsible for the editorial content: Hendrik Brandis) 23


don‘t be late.

www.earlybird.com


Earlybird Magazine - Consumer Service 2.0  

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