Founding a company is a journey full of challenges: from the right idea to the question of financing, serial founders like Hakan Koç and VCs like Valerie Bures provided tips for the start-up scene at this year’s Hinterland of Things Conference.
This year’s Hinterland of Things Conference in the Bielefeld City Hall revolved around the startup trends DeepTech, the current job market and the strength of the German “Mittelstand”. Investors and experienced entrepreneurs exchanged ideas with startups from all over Germany and shared valuable insights. We have summarized the six most important startup tips from the experts here.
Unicorn and serial entrepreneur Hakan Koç founded the company Auto1 years ago, a trading platform for used cars. How did he come up with the idea? He had bad customer experiences when buying and selling cars and knew that it could be done better. It’s best to choose a topic that you have personal experience with, he says. “You can start with yourself. The mundane answers are the best. Everyone has contact with large markets. From a consumer perspective, there are many simple topics where things can go wrong,” says Hakan Koç. He has since founded another startup, again in the consumer sector and again with an idea that is designed to solve a specific problem: his startup Better Roaming offers international e-Sims for travelers.
The tip from Koç’s speech: solve problems from your own everyday life. If you choose a topic that is close to your heart, you will be more motivated and have a better understanding of the needs and challenges of your target group.
“It’s about simplicity. Why has WhatsApp become so big? Because it’s simple. If we manage to build (simple) B2B software, we can digitize old industries.”
Daniel Khachab, CEO @ Choco
Daniel Khachab is the founder of the B2B food tech company Choco and explains how important it is to develop easy-to-use products if you want to digitize old industries. Choco optimizes the ordering processes of restaurants and manufacturers and helps them to become more efficient. At the same time, the startup is reducing food waste worldwide. In February 2023, the Berlin unicorn was valued at 1.2 billion euros.
Simplicity is the key to success in traditional sectors. Khachab believes that the fact that so much food is wasted in the supply chain is a communication and transparency problem that he solves with Choco. “It’s a networking problem. And the best solution for a networking problem is networking technology.”
Khachab also believes that AI is the key to simplicity and digitization: “If your job is to digitize old industries, then use AI,” is the Unicorn founder’s advice.
Do you have an idea that could solve a problem in industry or B2B? Then team up with a medium-sized company – it’s a win-win situation for everyone. You benefit from their network, experience and customer data, while the company optimizes its processes and becomes more efficient.
Dr. Fabian Kracht used to work for Peri, a medium-sized company that makes formwork and scaffolding systems, and now has his own consultancy for medium-sized companies. He advises startups to work with medium-sized companies to open doors to new customers and employees. “For the sales cycle, it helps to have familiar (medium-sized) names,” says Kracht. Cosuno founder Christoph Berner adds: “Know your customers when you do sales. It is important to understand: Who am I selling to and what are the processes?”
Cosuno is a B2B platform where construction companies can tender projects and purchase and manage construction services.
Don’t just look at your immediate competitors, because they’re usually not the most interesting. XAngle partner Valerie Bures emphasizes the importance of differentiating yourself in the labor market and knowing which industries you’re competing with for coveted talent. Her founder tip: It is crucial not only to keep an eye on direct competitors, but also on all market players who share potential employees with you. At this point, it is particularly important to develop a strong brand in order to attract specialists and customers.
Founders often underestimate the importance of financing in the later stages, says XAnge partner Valerie Bures. While there is a relatively large number of offers in the area of early-stage funds, the selection of investors in Germany shrinks significantly as soon as companies aim for a Series B. Bures emphasizes that the real success for startups does not necessarily lie in the Series A, but in successfully securing the Series B. Founders should therefore consider the scaling phase right from the start. Her tip for founders: “Ask your VCs: Are you going to take me to Series B or not?!” It is best for founders to consider the long-term goals of the company and plan the financing accordingly. At the Hinterland of Things conference, various investors and experts were unanimous in their assessment that the scaling phases, which require a great deal of capital for growth, are currently not easy to finance in the German market and that startups are therefore choosing to work with foreign investors.
Consider what kind of founder you are. A startup doesn’t necessarily need venture capital. Magdalena Oehl, founder of TalentRocket, points out that there are different ways to successfully finance a company. For her, the bootstrapping method worked. Bootstrapping is the low-budget way of financing a startup, in which the founders do without external financing. The capital comes mainly from savings, money from friends or family, public funding or a small bank loan. For Magdalena Oehl, this decision has paid off:
Without VCs, I think much more sustainably and long-term in terms of customers.
Magdalena Oehl, founder @ TalentRocket
VCs are usually an authority that startups have to take into account in many decisions as soon as they are invested.
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