SCB14: AWD Founder Carsten Maschmeyer Q&A

By David Knight |

The 2014 edition of Startup Camp was perhaps a little bit more low key than last year’s event – although it still attracted a vibrant crowd. The conference, organised by the Entrepreneurs Club Berlin, continued its trip around the city, taking place last week at the Lichtenburg campus of the Berlin School of Economics and Law having visited Schöneberg and Kreuzberg in recent years.

Without a political heavyweight like the then-Vice Chancellor Philipp Rösler in 2013, attention was turned to a business heavyweight in the form of Carsten Maschmeyer. In 1988, he founded AWD Holding, which went on to become one of Germany’s biggest financial services companies and a household name. Having taken AWD public in 2000, Maschmeyer sold his shares in 2007, and turned his attention to numerous other enterprises – including startups.

His investments – which come under the umbrella of the Maschmeyer Group – include early-stage companies such as limo service Black Lane and China content specialists 88TC88 (through its ALSTIN subsidiary), with a total of €68 million invested last year alone.

At Startup Camp, he gave attendees an insight into the strategy which has seen him become an incredibly successful entrepreneurs and business consultant: Capital is not the most important factor for startups; you must have an original idea for which potential customers are already willing to pay; and a willingness to adapt where necessary to the markets.

‘Buy-ology’, the science of selling, is paramount, Macshmeyer said.

After his talk, Silicon Allee sat down with him to pick his brain on the digital scene in 2014.

SILICON ALLEE: What does the future look like for startups in Berlin and Germany?

CARSTEN MASCHMEYER: Berlin is a new Silicon City, but the level of quality is currently lagging behind quantity. If the trend continues as it has done and 50 companies are founded every week, then there is going to be some disappointment along the way; with so many people looking to make money, not everyone’s going to come out smiling at the end. My hope for Berlin is that the best companies safely make it to the fore – the startup scene will not get any better if there is always such a surplus of companies. If you approach it thinking, ‘I’m cool and want to found a startup‘, that is not a valid motivation. You need a great product, a great service offering, and the ability to bring both to the market. But, ‘I want to start up my own business because that’s what the coolest people do’ – that just won’t cut it.

SA: Do you believe that the general culture amongst students and young people in Germany to forego the risk of starting their own company is changing?

CM: Before, it was simply a case of starting studies in order to finish them. Today, higher education offers the opportunity to try out, discuss and develop ideas. This in turn means the willingness to found companies is higher and that kind of optimism is great. Concepts must, however, be grounded in customer cultures, and from there only the best will emerge to be successful players.

SA: What does the future look like for financing new companies?

CM: Well, whilst we now have successful companies whose founders can execute and internationalise well, we need to begin to see more successful exits. This will encourage more investors to be bolder, take risks and invest more. In short, success breeds success. If there are no good exits from investments, there is no evidence that that investment is worthwhile and it will drop off.

SA: What about the banking sector itself?

CM: I believe that when it comes to the subject of money it has now become evident that many, many people are mistrustful of the Internet. They are worried that startups could be fraudulent, and need to be persuaded that nothing will happen to their data and fraud is out of the question. This will take a while.

I believe that this breakthrough can only be achieved by very large financial concerns and not by small startups with a staff of 20 people; the banks will succeed in the end.

SA: You only invest in about 1 percent of the ideas and teams you look at. How do you decide?

CM: For us it always depends on the approach. Is there an idea yet? What is the competition like? How do we think customers will react? And what about the founders involved? We believe that the right character can learn anything, but the right character cannot be learnt.

SA: How optimistic are you for the future of the digital economy in Germany?

CM: Very, very optimistic. … Everything will be faster, more digital and more convenient, but not to the point of completely changing the world. The Internet can only benefit those who are connected; real production lies in industry, in goods and in food. The Internet can never replace that.