For Benjamin Rohé, serial entrepreneur, angel investor and managing director of German Tech Entrepreneurship Center (GTEC), initiated by ESMT, the problem is clear: “Germany is lagging far behind in digital transformation and the implementation of new technologies.” As he sees it, German corporations struggle to find and embrace the disruptive ideas they need to succeed in the future, while German startups find it hard to get the support and investment they need to flourish. By creating Germany’s first open and independent platform for entrepreneurship and innovation, where entrepreneurs, corporates, and academia can collaborate, GTEC provides an answer.
GTEC launched on July 1, 2015, at the ESMT Campus with founding partners from industry (RWE and Henkel Adhesive Technologies), foundations (Globumbus and Sigmund Kiener), a law firm (Noerr) and an international business school (ESMT). A day following the launch, at the ESMT Annual Forum on “Entrepreneurship: Moving beyond the familiar,” at an interactive session on why collaboration works, Benjamin Rohé was joined by Dr. Inken Braunschmidt, RWE Chief Innovation Officer, and Paolo Bavaj, Corporate Director for Business Development at Henkel, along with Patrick Boos, Partner at d-group, and Dr. Thomas Prüver, StB, WP – Senior Manager at Ernst & Young.
Dr Braunschmidt and Paolo Bavaj, leading figures from GTEC’s founding partners, two of Germany’s most successful corporations, recognize the same challenge. According to Dr. Braunschmidt, “At RWE, we have 100-year history of innovation but within a set business model. That business model is no longer working. Now we need cross-pollination and exchange.” Paolo Bavaj (Henkel) supports this, “Industry gets disrupted from outside the industry – by developments not on our radar. Innovation can only happen through collaboration.”
Their case for collaboration is compelling. Corporations need innovation in both product and business model. The single-industry or one-corporation incubator model practiced until now in Germany has not delivered results. Working cross-industry with both early-stage and later-stage startups will expose Henkel and RWE to a much greater range of ideas and business practices. This fits with new media and e-commerce expert Patrick Boos’ experience, “Corporates don’t think about how digitalization is disrupting their core business model. They need startups to give them ideas on how to leverage existing assets, e.g. customers, brand, processes, experience, but also how to embrace digital transformation.”
The session’s audience wants to know what this means in practice and what’s in it for startups. First, as GTEC’s Benjamin Rohé outlines, are the benefits from the GTEC | Lab – 1200m2 of office, meeting room and presentation space at the ESMT campus in the heart of Berlin. The Lab houses two accelerator programs – the Berlin Startup Academy for early-stage initiatives and a part of GTEC, and Techstars, one of the best known later-stage accelerator programs in the world. It will also be home to a few hand-picked GTEC | Lab member startups, selected by GTEC’s directors and its founding partners on the basis of being “technology-driven with the potential for global relevance.” The focus for promoting entrepreneurship goes far beyond Berlin, to Germany and the rest of Europe. Three GTEC | Lab startups were announced at the launch on July 1: SMART DRIVE – an automative solution from Eastern Europe; UVizr – a wearable device to monitor sun exposure founded by a Russian woman living in Berlin; and INTACT – hardware and software health systems founded in Italy. They and the other startups that join them over the coming months will benefit from mentoring from the founding partners, access to free resources from the GTEC | Lab partners, including online office tools and a high-tech innovation lab, and direct links to the GTEC ecosystem of investors and advisors. As Paolo Bavaj adds, “It’s not about money. It’s about offering research facilities, expertise and access to market.”
Entrepreneurship education is GTEC’s second essential facet, providing students and aspiring founders with the knowledge they need to bring their ideas to life. Since February this year GTEC has been running its bi-weekly Open Lectures series at ESMT, at which key entrepreneurs, from Martin Varsavsky (Fon) and Stephan Schambach (Demandware) to younger founders such as Nora-Vanessa Wohlert and Susann Hoffmann (Edition F), share their personal experiences. In the future, GTEC will host Open Office Hours with founding partners and other relevant experts for local startups and a range of workshops, some of which were already featured at the opening, to help founders benefit from the powerful innovation cluster Berlin already has become.
Working with corporates is not always straightforward for startups. As Dr. Thomas Prüver of Ernst & Young says, “For a startup, working with a corporate is very different to working with a VC.” Dr. Braunschmidt and Benjamin Rohé explain how GTEC and its founding partners are making sure the deal works both ways. Flexibility is a significant part of GTEC’s offering. Unlike other accelerators and incubators, GTEC takes no equity and it accepts startups on a rolling basis throughout the year. RWE and Henkel are changing their standard practice for collaboration. Moves such as reducing contract lengths, limiting competition and exclusivity clauses, and positioning innovation and business development teams to make the case for startups, are designed to make founders feel fully secure.
Silicon Valley has shown the power of collaboration between corporates, entrepreneurs, academia, and investors. It has also shown that innovation is not just about a business plan or a product but also about a way of working, including agile development with sprints not waterfalls and keeping teams lean. Corporates need this influence and startups need support. Another audience member asks why Berlin and not another German city closer to where GTEC’s founding partners are active. The answer is straightforward: there is already a trend for entrepreneurship and research here and it’s by uniting these diverse ideas, drives, and resources present in Berlin that Germany can maintain its lead. As the pace of entrepreneurship in Berlin quickens, GTEC and its founding partners are well placed to help the blossoming cluster become a powerful force for innovation across Europe and beyond.