How TU Berlin is churning out 25 to 30 successful startups every year
“People underestimate the impact of universities on the startup scene”
Next Wednesday (14 November), wantrepreneurs and startups from the TU Berlin can listen to startup luminaries like Soundcloud, Gidsy, Amen, 6Wunderkinder and Amen about how to start and build your own company. It’s one of the many things that TU Berlin does to try to stimulate entrepreneurship among science students as a “third way” for their career.
And it seems to be quite successful. Every year, TU Berlin spins out 25 to 30 startups from their in house incubator. Most of these raise money before they leave the program, and a lot of them grown into successful businesses.
Whiteboard talked to Agnes von Matuschka, the ambitious founding director of the Technical University Centre for Entrepreneurship: “People underestimate the impact of universities on the European startup scene,” she says.
TU Berlin has always been a very entrepreneurial university. It was home to the very first German incubator – back in 1983.
Agnes von Matuschka: “Some teams that came out of that program still exist, like Fritzbox, which today is a famous provider of modems worldwide (ed: link goes to ‘TU Berlin Hall of Fame’). But after ten years, the interest in entrepreneurship gradually faded, there was only one person working on the program. That changed again in 2000, when the dotcom bubble burst.”
“I was working at the career service back then, and I had students telling me that they sent 20 applications to tech companies, but no answers. That’s when the university saw that we should encourage these young engineers to consider a third career path – that of entrepreneurship. In 2007, we started our incubator.”
“The incubator is really the heart of our program: teams stay in the program for 12 months, they get mentorship from qualified people, investors come visit them. It’s a very thorough and successful program.”
Twelve months seems very long: most incubators and accelerators range from 6 weeks to 3 months?
“It’s long, but quite a lot of them still have some work on their prototype, which takes more work than purely building apps or e-commerce. We have teams working on robotics, hardware. That takes a while to get right, and then comes the part where they have to finetune their business model too.”
“Also, in Germany there’s something called a EXIST-Grunderstipendium – it’s a grant of up to 115 000 euros that is paid out over 12 months, and that you don’t have to pay back. It’s a 12 month period where you can work on your business model by trial and error. All the teams in our incubator get this stipend. We coach about sixty teams like this, from first idea to financing.”
Do you see any important shifts over the last years?
“I can say that the quality seems to have changed – most teams are now financed or have their first clients by the time they leave us. This wasn’t the case before. It’s also because Berlin has become such an interesting place for startups and seed investment has become more popular. The quality of the university teams and the level of innovation is very, very high.”
Can you name a few companies that were financed lately?
Let me see, there’s Komoot, Machtfit, Panospektiv.com, who made a ball camera that you can throw in the air and that makes pictures at a 360 degree angles – they have more than 3 million clicks on YouTube. Akklamio got financing for their custom made marketing tools. And there’s Carzapp, a B2C car sharing platform.
Check out the video of TU Berlin’s incubator graduate ‘Wurfkamera’:
Are most TU startups successful, as a rule?
“Yes, often they become thriving family businesses. Our oldest one is 45 years old!”
Do your engineers also use the startup grammar that’s so in vogue lately? Lean canvas? Minimum viable product?
“Yes. We use those tools in consultations, and they’re very helpful. We have a guest lecture from Alexander Osterwalder soon. Engineers work very well with the canvas.”
Has the profile of your teams changed over the year?
“Not so much, I think – the pool of talent stays the same, as we’re still focusing on people from the TU Berlin. Our spectrum is actually very wide – we have people working on desalination projects, a lot of IT startups, route planning apps. We help anyone with an innovative idea who comes from TU Berlin or a partner institution. Obviously we can’t provide knowledge in all these fields, but we do have a strong network in place that we can scour for the right partners.”
“We focus on getting their team right, and then we instill them with market perspective and the importance of getting their first customers.”
It’s a complaint you hear often about European engineers: great technical skills, but they suck at thinking about at user experience, interface, marketing.
“That’s one of the greatest challenges in our program, because we often work with teams of three engineers. We require them to have one team member who is good at creating a business, or at least a mentor who has experience in this field.”
“Our experience is that the more teams in the incubator get financed, the faster the new teams learn. This year we had 5 teams who got financing – that’s incredibly valuable to the other teams, because they see how important it is to find customers fast, to talk to VC’s from the very start.”
“What we also miss a bit are international role models. That’s why we invite role models from the Berlin scene like SoundCloud on our Inspiration Talks, to talk about their successes and about the fun they had when founding their company. That’s very valuable.”
“I used to spend half my budget on inspiration activities – to offer entrepreneurship as a “third way” for your career. Luckily, with Berlin becoming a startup hub things got easier. Now we can help teams rather than trying to make teams.”
Entrepreneurship vs. a “proper job” in management
Are German engineers very risk averse? What’s the main barrier?
“Oh, German people are very risk averse compared to other countries. But also, we lack a network of business angels that helps startups to TRY things. In California, more people get the opportunity to fail because it’s easier to get your hands on 250 000 euros to try an idea. In Europe, you’re not financed to even start working on your idea, so it’s hard to fail here. I think more people would assume the risk if they had the opportunity.”
“But as a rule, in Germany entrepreneurship is not as respectable as going into management, or getting a “proper” job.That’s why we invited companies like Gidsy, Amen next week – they’re not from Berlin, they came here to build an international company. If you look at how fast they build their company, how outgoing and international they are. Germans sometimes have difficulty seeing the possibilities outside their country. Germany is a big market of 80 million people, but why not go global from the start?”
Your large home market is a handicap?
“Yes, ironically. Often, you can make a nice living from the German market. But I want us to think more in terms of becoming an international leader. We sent 5 teams to the US this summer, they came back with a lot of contacts and ideas, and they carry that back into the incubator. We’ll do that every year from now on.”
Do you also partner up with other universities from around Europe?
“Yes. We work with FU and Humboldt University – we have the same coaches, organise events together. Students from Zürich can come to our incubator and vice versa. Our entrepreneurs survey is held together with TU München and Karlsruhe. We want that to become a monitoring tool for university startups.”
“Ideally we would do that on a European scale, even. Because I think that people underestimate the importance of universities for startup culture – it would be good to be able to show how many jobs are created through university startups, to know how long these startups survive.”
“It’s also important for us to work with our alumni. We have 8000 entrepreneurs in our alumni network that we have data about, so we invite them to our events. They’re usually very interested to meet startups from their alma mater. We are trying very hard to build a real community here. By being nice to startups, we hope they’ll be nice to our new startups later, when they’re successful businesses – by investing in them, or bringing clients. It’s essentially the Silicon Valley idea of paying it forward.”
If you’re eligible, you can register for the Inspiration Talk event with Soundcould, Gidsy, Amen and others here.
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