August 17, 2016
If you look at the current tech scene, one can come to the conclusion that founding a company has never been very easy. There are so many accelerators, incubators, mentoring and coaching programs that rising a successful tech company should be like a walk in the park. But then why do so many seem to fail?
Let’s take the FinTech scene as an example. According to fintechnews.ch, there are 185 digital finance firms in the Swiss market; Germany has more than twice as many (450), as shown by a study by Barkow Consulting last year. The support for the industry is quite evident through the 300-million-euro investments in German FinTechs. It shows big growth, a big hype and a lot of success stories but then, there is a dark side to the glory.
The first FinTechs are already dying. Online payment service Paymill and payment FinTechs Yapital and Click-and-buy are only a few examples for FinTech flops.
In my opinion, what really helps to found a successful business is a company builder.
A company builder is not an accelerator in which companies undergo a coaching period. It is also not an incubator that aims to grow companies which leave the nest. It is not a mentoring program which leaves the founders alone after three months with maybe slightly more knowledge than before but not enough to survive. Instead of supporting a startup only through risk capital and hoping for the unsurpassable high flyer, a company builder is engaged intensively in each venture. A company builder analyzes the market, searches for gaps in digital offerings and develops solutions.
I believe that a company builder has advantages for founders as well as for investors. I can see this from both sides of the story because of my own experience.
I co-founded two internet companies, the nightlife-website usgang.ch, and amiando, an event management tool. Both of them now belong to large corporations – usgang.ch to Axel Springer and amiando to Xing. Since 2010, I have had the opportunity to be close to many FinTech investments in both Switzerland and Germany. Since the end of 2015, I am a member of the advisory board of FinLeap, a Berlin-based FinTech company builder.
With more than 700 applicants every month, a huge number of potential employees approach FinLeap. Since its founding almost two years ago, FinLeap employs 250 employees from more than 30 nations and has successfully founded nine ventures with the next projects already in the pipeline. All of them grow, found cooperations between them, win over banks as customers – or operate with a full banking license themselves, like solarisBank.
It is an amazing experience for me as a FinLeap companion to not only have a focus on one project but to be parallelly involved in many exciting business models at once. As a result, we often see synergies and cooperations between the ventures. For the founders, the advantages are clear: instead of being occupied with salary statements, legal issues or marketing, they can fully concentrate on the core business – with a seed funding between 0.5 and 5 million as a basis.
The most important ingredient for a successful FinTech is the choice of the right founder. This has nothing to do with the on-our-way-home-in-the-train-we-had-a-great-idea founder romance, but it concentrates on a work-related promising ideology. The majority of founders at FinLeap are not just-graduated students but are carefully chosen industry experts. One of FinLeap’s ventures Savedo, a marketplace for fixed-term deposits in Europe, is the perfect example. Its co-founder Christian Tiessen has already successfully co-founded the online design shop Cascandra, and later on fab.de, leading them up to the exit. Christopher Oster, Managing Director of online-insurance broker Clark, co-founded the platform for holiday apartments Wimdu and additionally possesses many years of experience in strategy consulting for the Boston Consulting Group. Clark just recently closed its first financing round, a so-called Series A, with the astonishing amount of 13.2 million Euros – a great achievement. This proves that the FinLeap model is working.
These represent only two examples of the many present at FinLeap. Expertise and passionate entrepreneurship make a FinTech idea successful, but a company builder can contribute on many levels.