WEBVTT 00:00:00.000 --> 00:00:19.920 00:00:19.979 --> 00:00:23.559 Hello and welcome, everybody. This is Joe from StartupRate.io, 00:00:23.939 --> 00:00:27.159 your startup podcast and YouTube blog from Germany, Austria and Switzerland. 00:00:27.419 --> 00:00:30.719 And today I do have Martin here with me. Hey, how are you doing? 00:00:31.339 --> 00:00:32.419 Hi, great to be here. 00:00:33.139 --> 00:00:40.539 Totally my pleasure. I usually give a little introduction about the guests that I do have here. 00:00:40.879 --> 00:00:45.379 And we may tell our audience up front, you are not per se an entrepreneur, 00:00:45.599 --> 00:00:47.799 but you're working on the investment side. 00:00:48.559 --> 00:00:53.699 You are with Visionaries VCs. You're based in Berlin. 00:00:53.939 --> 00:00:59.899 And you have been the former growth lead at tier during a hyper growth phase. 00:01:00.099 --> 00:01:03.759 I think you have one or two stories to tell from this time. 00:01:04.359 --> 00:01:08.279 You also have been a competitive athlete. 00:01:08.919 --> 00:01:14.419 I'm sure we'll also talk about that. Plus, you specialize in BASAS, 00:01:14.839 --> 00:01:19.539 AI, cybersecurity, and deep tech, where you're exactly at the right place here at StartupRate.io. 00:01:19.799 --> 00:01:24.739 You have a strong belief in operational experience and radical accountability 00:01:24.739 --> 00:01:27.159 in VC. We'll talk about that, I think. 00:01:27.519 --> 00:01:33.759 And you lead investments that solve real-world industrial problems via applied AI. 00:01:34.779 --> 00:01:44.919 I also got some names here of investments, not you personally did, 00:01:45.219 --> 00:01:48.339 but visionaries, including Lovable, 00:01:48.739 --> 00:01:50.199 the Unicorn Personio, 00:01:50.919 --> 00:01:57.239 Miro, Pigment, Tacto, Apron, Choco, Pivot, and Central. 00:01:57.399 --> 00:02:02.059 And of course, we link down here in the show notes interview with Central. 00:02:04.039 --> 00:02:06.999 So that was already a lot. Take a deep breath. 00:02:07.679 --> 00:02:12.399 So let's talk a little bit about your journey and your vision. 00:02:12.939 --> 00:02:18.099 How did your time at Tear for everybody that that's one of the e-scooter companies, 00:02:18.279 --> 00:02:22.639 the hyper growth e-scooter companies during its hyper growth phase influence 00:02:22.639 --> 00:02:25.039 your approach as an investor? 00:02:26.019 --> 00:02:29.179 Yeah, that's a great question, Jörn. 00:02:29.179 --> 00:02:36.979 And just for background, I was with Tear pretty much from its pre-seed stage until Series B, 00:02:37.359 --> 00:02:40.519 which meant that within a very short period of time, within one year, 00:02:40.839 --> 00:02:46.719 we went from zero to 400 people, reached 100 million annual revenues and similar 00:02:46.719 --> 00:02:48.479 number on the funding side, 00:02:48.739 --> 00:02:53.679 which I always refer to as a little bit of a positively chaotic scaling journey, 00:02:53.899 --> 00:02:57.599 because there was a lot of positive elements and there was also a lot of chaos. 00:02:57.599 --> 00:03:08.279 And one thing that was definitely very, very clear in that short period of very intense time is that. 00:03:09.689 --> 00:03:14.909 The people you work with really, really define of what you can achieve. 00:03:15.409 --> 00:03:21.049 And exceptional talent will find a way to own the outcome and really build something 00:03:21.049 --> 00:03:24.249 that will move the needle in some context. 00:03:24.509 --> 00:03:29.469 And this is one really interesting conversation we always have with founders 00:03:29.469 --> 00:03:32.669 that are building very early stage teams, especially investing in pre-seed and 00:03:32.669 --> 00:03:37.549 seed, is that who you should hire and how do you know that person actually performs well? 00:03:37.549 --> 00:03:39.849 Did you hire the right person for the right role? 00:03:40.289 --> 00:03:46.909 Yes or not? And if somebody is underperforming, is it because they are not doing 00:03:46.909 --> 00:03:50.789 the right responsibilities or not in charge of the right responsibilities or 00:03:50.789 --> 00:03:54.049 whether ultimately it's just not a fit for the company? 00:03:54.049 --> 00:03:57.489 And one key learning that really, really shapes the way that we are trying to 00:03:57.489 --> 00:04:01.749 work together with founders is this perspective of how we look at talent and 00:04:01.749 --> 00:04:05.829 ultimately how you can hire the type of people who you can use as Swiss Army 00:04:05.829 --> 00:04:07.749 Knives in very different situations. 00:04:09.409 --> 00:04:14.729 And just to be clear, those people, Swiss Army Knives, they don't necessarily 00:04:14.729 --> 00:04:19.989 need to come from just a handful of really big Berlin-based startups or a handful 00:04:19.989 --> 00:04:21.989 of consultancies, right? 00:04:22.669 --> 00:04:28.329 Absolutely not. these type of people can come from pretty much any types of backgrounds. 00:04:29.629 --> 00:04:31.929 Very often, in the majority of the cases, 00:04:32.309 --> 00:04:37.889 they have at least some level of unconventionality in their life story, 00:04:38.729 --> 00:04:41.809 which doesn't mean that they went to some Ivy League schools, 00:04:41.989 --> 00:04:46.569 but very often they might end up coding in their parents' basement at the age 00:04:46.569 --> 00:04:51.009 of 12 and just cannot stop reading books about building things. 00:04:51.169 --> 00:04:53.789 And I think that's something that just comes up again and again. 00:04:54.049 --> 00:04:56.889 Uh with these people um. 00:04:56.889 --> 00:05:04.209 You i assume you had quite a lot of fun at here but what motivated you to to 00:05:04.209 --> 00:05:12.149 to be to become really from an operator turned into a vc um 00:05:12.969 --> 00:05:20.049 did you think at the beginning it was more relaxed job and how did you end up at visionaries club 00:05:21.029 --> 00:05:27.389 Yeah it was not a very conscious decision at all when i was with tier i had 00:05:27.389 --> 00:05:34.009 a friend who was running entrepreneur first batch in berlin and we went into 00:05:34.009 --> 00:05:35.009 a couple of conversations. 00:05:36.929 --> 00:05:44.869 And we were talking about when i personally thrive the most and i also realized 00:05:44.869 --> 00:05:49.549 in that conversation, which I didn't know about myself, is that I thrived the most. 00:05:50.668 --> 00:05:55.608 The more I look outside of my regular day-to-day environment, so to say. 00:05:55.788 --> 00:05:58.988 And I think there are different types of people here. I definitely fall into 00:05:58.988 --> 00:06:05.888 the camp of really thriving in the environments where I get new impulses, 00:06:06.208 --> 00:06:08.988 not just from a topic perspective, but also individuals' perspective. 00:06:09.728 --> 00:06:15.028 And then this friend of mine told me, hey, I actually have two friends who are 00:06:15.028 --> 00:06:17.628 actually founders, former founders, and they are launching a fund. 00:06:17.628 --> 00:06:23.108 And it sounds like that since they are building this venture fund from scratch 00:06:23.108 --> 00:06:28.288 and you get to spend your entire day speaking to people who are thinking how 00:06:28.288 --> 00:06:32.188 the future should look like in a different way, changed by technology, 00:06:32.628 --> 00:06:37.468 sounds like a very good intersection of your operator DNA, building something 00:06:37.468 --> 00:06:38.968 actually as in a venture fund. 00:06:38.968 --> 00:06:43.588 So being kind of like an entrepreneur in VC and also being able to have this 00:06:43.588 --> 00:06:46.568 very outward-looking way of working. 00:06:46.788 --> 00:06:51.328 And I pretty much just took that introduction, not expecting too much. 00:06:51.488 --> 00:06:54.148 And I think a lot of things resonated with me. 00:06:54.368 --> 00:07:00.508 And the things that came together, the different DNAs of Visionaries Club, made me very excited. 00:07:00.608 --> 00:07:03.448 And that's where I have been in the last six years. 00:07:07.028 --> 00:07:10.368 Um you often speak about radical 00:07:10.368 --> 00:07:17.868 accountability what does this mean when you work with founders for example let's 00:07:17.868 --> 00:07:23.508 let's think um i'm one of your investments and currently it's not going well 00:07:23.508 --> 00:07:27.928 what what would you expect in terms of radical accountability um 00:07:29.612 --> 00:07:37.732 Radical accountability is a pretty broad term, I would say, and definitely don't 00:07:37.732 --> 00:07:42.912 only use it in the relationship of VC to founder, but also the other way around. 00:07:43.172 --> 00:07:48.352 And this is something that we also, most importantly, encourage founders that 00:07:48.352 --> 00:07:52.592 we back use within their own environment, so to say. 00:07:54.012 --> 00:07:58.592 Radical accountability is a little bit of a stolen term, I would say, 00:07:58.732 --> 00:08:02.872 from radical transparency from Ray Dalio, switching the word out, 00:08:03.052 --> 00:08:04.752 transparency into accountability. 00:08:05.112 --> 00:08:11.372 But it's very simply put, radical accountability means that especially in environments 00:08:11.372 --> 00:08:15.932 where there is a lot of change and just as I told you earlier, there is a lot of chaos. 00:08:16.572 --> 00:08:22.352 The one thing that you can only go back to and always can go back to is owning output. 00:08:22.592 --> 00:08:27.272 And that's really what radical accountability means, because everybody has ideas, 00:08:27.552 --> 00:08:30.592 everybody has comments about how things should be done. 00:08:30.812 --> 00:08:37.612 But what really differentiates the top 0.01% of startups from the rest is that 00:08:37.612 --> 00:08:42.092 this sense of radical accountability is pretty much soaked into the culture 00:08:42.092 --> 00:08:45.152 of how people think and get stuff done. 00:08:45.152 --> 00:08:48.712 And this is something that pretty much everybody is accountable, 00:08:49.032 --> 00:08:54.672 both on a positive and rather consequential negative side, when things are either 00:08:54.672 --> 00:08:57.492 executed very properly or not executed properly. 00:08:57.892 --> 00:09:04.872 We're now going a little bit into market insights and your investment thesis. 00:09:04.872 --> 00:09:12.872 And we may tell our audience because I do believe most of our audience are founders 00:09:12.872 --> 00:09:18.492 and they somehow have an idea they had heard Visionish Club before but we should 00:09:18.492 --> 00:09:23.332 tell them that you're around the data that I found around 600 million years 00:09:23.332 --> 00:09:24.512 assets under management. 00:09:24.712 --> 00:09:27.972 Your last fund was, I believe in 2022, 400 million. 00:09:28.572 --> 00:09:29.892 That's correct. Yes. 00:09:30.052 --> 00:09:34.032 And so you're one of the bigger VCs and therefore, um 00:09:35.481 --> 00:09:40.341 is of interest to me. But some of the things that first stood out is that you 00:09:40.341 --> 00:09:45.121 guys have a very unique base with limited partners. 00:09:45.321 --> 00:09:49.541 For everybody who's not familiar with the term, it's basically the institutions, 00:09:49.541 --> 00:09:56.241 the people who give you the money to invest them as VC, legacy industrialists, 00:09:56.401 --> 00:09:59.241 and modern digital entrepreneurs. 00:09:59.761 --> 00:10:06.321 How does that shape your portfolio strategy? Because It sounds like you have 00:10:06.321 --> 00:10:09.961 two magnetic poles and they always pull you in different directions. 00:10:10.961 --> 00:10:14.981 Yes. I'm happy to give you a little bit of background because I do think that 00:10:14.981 --> 00:10:18.641 this will help also scope the conversation a little bit. 00:10:18.821 --> 00:10:23.561 I just want to tell you and the listeners a little bit about the origin of Visionaries Club. 00:10:23.861 --> 00:10:29.081 So we have been around for some six years. And one very important theme that 00:10:29.081 --> 00:10:33.501 we have all across the investment team is that everybody is a former operator or founder. 00:10:34.021 --> 00:10:37.561 Pretty much really everybody in the investment team. And this is something that 00:10:37.561 --> 00:10:42.981 we really wanted to incorporate into the very DNA of how we set up the fund ultimately. 00:10:43.801 --> 00:10:47.481 And back then when we set up the first fund generation, one very important decision 00:10:47.481 --> 00:10:53.181 we made was, as you said, that we only raise capital from entrepreneurs that we know well. 00:10:53.792 --> 00:10:58.012 And if you look at who these entrepreneurs are, as you mentioned, 00:10:58.272 --> 00:11:02.132 it's two very different group of individuals, but it's always the private people 00:11:02.132 --> 00:11:03.772 behind these companies. 00:11:04.012 --> 00:11:07.692 But on the one hand, we have a collection of some 30 Unicorn founders. 00:11:07.692 --> 00:11:11.492 If you look at, for example, Andre from Miro or Daniel from UiPath from Eastern 00:11:11.492 --> 00:11:14.832 Europe, Ilka from Supercell or Miki from both from the Nordics. 00:11:15.012 --> 00:11:18.392 If you look at Fintech, for example, Peter from Adrian, Guillaume from Checkout.com, 00:11:18.512 --> 00:11:21.812 but also a lot of Dach entrepreneurs such as Get Your Guide, 00:11:21.972 --> 00:11:23.612 Flixbus, HelloFresh, AutoEyes. 00:11:23.792 --> 00:11:26.972 Who build these very successful hyperscaling tech companies. 00:11:27.172 --> 00:11:30.392 And as you mentioned on the completely other side, we have this collection of 00:11:30.392 --> 00:11:33.712 family business entrepreneurs who are a little bit less conventional entrepreneurs 00:11:33.712 --> 00:11:36.032 because they didn't start these companies themselves, right? 00:11:36.312 --> 00:11:40.212 They inherited these multi-decade old family businesses from the what we call 00:11:40.212 --> 00:11:45.132 old economy or industrial economy that have been operating pretty much offline 00:11:45.132 --> 00:11:48.572 for a couple of decades, very often in manufacturing, logistics, 00:11:48.792 --> 00:11:50.112 distribution, wholesale. 00:11:50.332 --> 00:11:53.692 And what's really interesting about them and about Europe specifically, 00:11:53.792 --> 00:11:58.192 is that 80% of the European economy is owned by family businesses. 00:11:58.532 --> 00:12:03.272 So when we were thinking about bringing this entrepreneurial DNA into how we build the fund, 00:12:03.492 --> 00:12:07.852 we felt that if we look into the next decade and we look at the intersection 00:12:07.852 --> 00:12:11.712 of what we have to work with in the European economy and what technology can 00:12:11.712 --> 00:12:15.312 bring and unlock, this is really the intersection that we are looking into. 00:12:15.452 --> 00:12:19.912 This is very digital first entrepreneurs and this is very non-digital entrepreneurs 00:12:19.912 --> 00:12:22.752 who are incredibly important of how we think about the economy. 00:12:22.752 --> 00:12:25.852 So this is how we really bring this group of people together. 00:12:26.112 --> 00:12:29.912 And over the last couple of years, we scaled this one to some 600 million. 00:12:30.812 --> 00:12:33.672 And ultimately, if I really want to sum it up in one sentence, 00:12:34.052 --> 00:12:38.872 the single biggest leverage that we bring into the relationship we have with 00:12:38.872 --> 00:12:41.272 our founders that we back is that we, 00:12:42.172 --> 00:12:46.852 bring in these people and really connect the founders that we back with the 00:12:46.852 --> 00:12:49.312 right people at the right time across all this network. 00:12:49.552 --> 00:12:52.952 This can be about potential customer introductions. This can be about integration 00:12:52.952 --> 00:12:54.512 partners, hiring go to market. 00:12:55.052 --> 00:12:58.292 But based on our experience, instead of coming in with a high-level VC advice, 00:12:58.672 --> 00:13:01.932 we just take a step back and really execute on those introductions that are 00:13:01.932 --> 00:13:02.732 strategically important. 00:13:05.892 --> 00:13:10.932 I also do have a theory, maybe you also have an opinion on that. 00:13:13.228 --> 00:13:17.488 I'm now doing startup interviews with the project in Germany that I did before 00:13:17.488 --> 00:13:20.148 since, let's say, 13 years. 00:13:20.328 --> 00:13:22.488 And over time, I've seen a lot of 00:13:22.488 --> 00:13:26.268 entrepreneurs maturing, getting bigger businesses and so on and so forth. 00:13:26.388 --> 00:13:31.328 And when they're running the company for long enough, there is barely a difference 00:13:31.328 --> 00:13:34.348 between those people and the more traditional entrepreneurs, 00:13:34.568 --> 00:13:38.888 how they view their life, how they view the company and their outlook on the 00:13:38.888 --> 00:13:40.328 company. Would you agree to that? 00:13:41.568 --> 00:13:48.648 I would say it's really interesting, especially if you contrast industrial entrepreneurs 00:13:48.648 --> 00:13:50.528 with really, really large corporates. 00:13:50.528 --> 00:13:55.188 One thing that we made a very conscious decision on taking on these industrial 00:13:55.188 --> 00:14:00.368 entrepreneurs and how I would say they think about actually digital entrepreneurs 00:14:00.368 --> 00:14:06.108 is that since they own a very significant portion of the company and they are 00:14:06.108 --> 00:14:08.648 also in a very active strategic role, 00:14:08.908 --> 00:14:14.088 they can take decisions much faster and they can take risk with a much higher level. 00:14:14.648 --> 00:14:20.168 Again this is not a guarantee that they will suddenly all adopt highest you 00:14:20.168 --> 00:14:23.928 know the most advanced software and end-to-end agentic ai automation tomorrow 00:14:23.928 --> 00:14:28.328 but at least you can get an answer from them very very fast whether this is 00:14:28.328 --> 00:14:32.588 the right timing for them to speak to a certain software company or not i. 00:14:32.588 --> 00:14:39.868 See um we're not talking tvc and i would be interested maybe except for ai Hi, 00:14:40.268 --> 00:14:46.268 what sectors are you most bullish on right now, especially in early stage investing? 00:14:47.977 --> 00:14:54.497 Yes, this is a really good question. I would say that given our very DNA and 00:14:54.497 --> 00:14:58.977 kind of history, over the last couple of years, we built a relatively lean team. 00:14:59.397 --> 00:15:04.057 So in total, we are six people in the investment team. And that means that for 00:15:04.057 --> 00:15:09.637 us specifically, it doesn't make sense to split up the team by sector, right? 00:15:09.837 --> 00:15:13.537 So even though we have certain interest areas, for example, I personally look 00:15:13.537 --> 00:15:17.877 into a lot of topics on the, let's say, more technical side when it comes to 00:15:17.877 --> 00:15:20.917 data, infrastructure, architecture, AI, cybersecurity. 00:15:21.397 --> 00:15:24.177 These are all areas to love to look into. 00:15:24.437 --> 00:15:30.977 We are incredibly focused on founders and pretty much picture them within the 00:15:30.977 --> 00:15:33.897 bigger realm of what we find exciting, right? 00:15:34.117 --> 00:15:38.877 So if you look at the way that we work usually and work together with founders, 00:15:39.117 --> 00:15:43.897 we spend, I would say, 80 to 90% of our time on the ground in ecosystems because 00:15:43.897 --> 00:15:48.077 Europe is incredibly fragmented and you have absolutely no idea which ecosystem 00:15:48.077 --> 00:15:52.457 will produce the next really exceptional entrepreneur. You pretty much have to be there. 00:15:52.917 --> 00:15:57.217 Really try to find these founders, sit down with them and really understand. 00:15:59.357 --> 00:16:04.057 Why the timing of what they want to build fits into the broader market. 00:16:04.237 --> 00:16:06.657 And this can be in very different industries. 00:16:06.877 --> 00:16:10.677 For example, I personally have been looking into and working with a lot of founders 00:16:10.677 --> 00:16:13.297 in procurement, but also back teams in cybersecurity. 00:16:13.297 --> 00:16:19.297 Security, it can be about engineering, it can be about pretty much pure data, 00:16:19.757 --> 00:16:24.337 it can be about really, I would say we are very sector agnostic from that perspective. 00:16:27.537 --> 00:16:31.937 And which ones are the most interesting right now? 00:16:33.907 --> 00:16:36.907 Sectors yeah you can also speak 00:16:36.907 --> 00:16:43.407 from personal perspective because i do understand from from uh such broad company 00:16:43.407 --> 00:16:49.287 it's always difficult to speak like about this or that but your personal experience 00:16:49.287 --> 00:16:55.667 in your area of responsibility is totally fine um it's it's 00:16:55.667 --> 00:16:58.807 It's a really interesting question because we are now at 00:16:58.807 --> 00:17:03.307 a very interesting shift between cloud 00:17:03.307 --> 00:17:06.767 software 1.0 versus the next type 00:17:06.767 --> 00:17:10.707 of let's say software you can still call it software and i know you didn't necessarily 00:17:10.707 --> 00:17:17.027 want to get an ai answer but i would say one very clear shift that we are seeing 00:17:17.027 --> 00:17:21.907 at the moment is that traditional software as a service will very likely cease 00:17:21.907 --> 00:17:25.287 to exist in its current form in a very short period of time. 00:17:26.527 --> 00:17:31.227 And almost these models around services and software is emerging. 00:17:31.507 --> 00:17:35.147 Because if you look at, especially, for example, the industrial economy. 00:17:36.467 --> 00:17:40.387 One very interesting theme that we have been looking into, and maybe one thing 00:17:40.387 --> 00:17:46.227 to pinpoint very concretely, is how we are thinking about the automation of 00:17:46.227 --> 00:17:47.327 back office work, right? 00:17:48.107 --> 00:17:52.467 And this traditionally, for example, in software has been very much tied to sectors. 00:17:52.807 --> 00:17:57.267 So for example, you had to think about a very specific procurement software 00:17:57.267 --> 00:18:01.307 as a service that had, I don't know, an underlying database, 00:18:01.507 --> 00:18:05.007 some type of a user interface, maybe integration with legacy systems. 00:18:05.227 --> 00:18:06.507 And then you try to pretty much 00:18:06.507 --> 00:18:09.647 take these companies and then target these companies and roll them out. 00:18:09.867 --> 00:18:13.347 Now, what we are seeing is that if you look at some of the back office work, 00:18:13.347 --> 00:18:19.587 Let it be, let's say, insurance, procurement, sales, quoting, construction. 00:18:20.187 --> 00:18:24.827 You have these massive back offices where people are just sitting in front of 00:18:24.827 --> 00:18:28.647 their computer and have been doing the same repetitive tasks they have been 00:18:28.647 --> 00:18:31.347 trained to do for pretty much 10, 20 years. 00:18:32.071 --> 00:18:38.291 And in my view, this is going to be exactly the absolute first type of use case 00:18:38.291 --> 00:18:41.671 where full level of automation will be achieved within a very, 00:18:41.731 --> 00:18:42.651 very short period of time. 00:18:42.731 --> 00:18:48.331 So we absolutely don't see any scenario where these tasks won't be 100% automated 00:18:48.331 --> 00:18:49.631 within a couple of years of time. 00:18:49.851 --> 00:18:54.411 And this is especially relevant because this is exactly the type of talent also 00:18:54.411 --> 00:18:58.131 in our economy that is retiring fast and there is no supply of it. 00:18:58.131 --> 00:19:02.971 Because you have to be somewhat educated in order to execute on this task, 00:19:03.191 --> 00:19:06.551 but it's actually not something that needs incredibly sophisticated, 00:19:06.551 --> 00:19:11.371 you know, qualification that cannot be taught in certain areas. 00:19:11.651 --> 00:19:17.811 Why do you believe Europe is positioned to lead in the application layer of AI globally? 00:19:18.991 --> 00:19:24.691 The reason for that is that Europe is in a very special position. 00:19:25.931 --> 00:19:32.471 If you look at the talent in Europe, it's very clear, speaking to entrepreneurs 00:19:32.471 --> 00:19:35.571 from a global scale, speaking to investors from a global level, 00:19:35.751 --> 00:19:37.831 that Europe has absolutely zero talent problem. 00:19:38.211 --> 00:19:41.651 This is something that is sometimes a massive misconception. 00:19:42.431 --> 00:19:47.171 Europe has incredible engineers, incredible entrepreneurs. it's a very fragmented 00:19:47.171 --> 00:19:53.451 ecosystem, but from a very fundamental perspective, I think this is just one 00:19:53.451 --> 00:19:55.871 thing that is, I think, very important to get right. 00:19:56.211 --> 00:19:58.991 When it comes to the application layer of AI. 00:20:00.707 --> 00:20:03.607 And especially if you look at the European economy and getting back to, 00:20:03.687 --> 00:20:08.027 for example, how many of these industrial companies, well, for what it's worth, 00:20:08.147 --> 00:20:12.007 you know, non-industrial companies necessarily, have been working with traditional 00:20:12.007 --> 00:20:14.747 software like SAP and others. 00:20:15.287 --> 00:20:19.527 You know, some of these existing software stacks have been around for 30 years, right? 00:20:20.907 --> 00:20:23.887 And there is an absolute clear reason for that. And the 00:20:23.887 --> 00:20:26.847 clear reason for that is that their lock-in is so 00:20:26.847 --> 00:20:30.367 incredibly high that challengers over 00:20:30.367 --> 00:20:34.147 the course of the last couple of decades absolutely failed to remove them because 00:20:34.147 --> 00:20:39.247 they are so ingrained and so customized to the local environment that it was 00:20:39.247 --> 00:20:43.807 just pretty much impossible to create a strong enough incentive for these customers 00:20:43.807 --> 00:20:47.167 to put effort into removing them and adopt a new solution. 00:20:47.667 --> 00:20:53.307 Now, the opportunity for Europe right now, where pretty much this ingrainedness 00:20:53.307 --> 00:20:55.007 is the highest, I would say, 00:20:55.727 --> 00:21:00.587 is that with the shift in technology when it comes to mapping, 00:21:00.747 --> 00:21:06.507 let's say, integration endpoints, when it comes to using new technologies around 00:21:06.507 --> 00:21:09.687 AI to facilitate data migration, data schema mapping, 00:21:10.307 --> 00:21:14.367 mapping out workflows, and pretty much ultimately automating these workflows 00:21:14.367 --> 00:21:16.627 is something that was not unlocked before. 00:21:17.367 --> 00:21:23.847 And from an application layer perspective, this is what we have context on. 00:21:24.027 --> 00:21:28.307 And I think the key word here is contextuality. And this is something that Europe has. 00:21:28.907 --> 00:21:33.287 The technology is there. We can use it pretty much from a foundation model perspective, 00:21:33.287 --> 00:21:36.207 which we don't have to be a winner in. 00:21:36.527 --> 00:21:39.887 And ultimately, this is exactly where the opportunity is, because you can match 00:21:39.887 --> 00:21:44.667 this level of contextuality and generate a new generation of challenges that 00:21:44.667 --> 00:21:50.707 can ultimately remove this absolute high locking of incumbents that have been 00:21:50.707 --> 00:21:52.347 dominating the industry for many, many years. 00:21:54.747 --> 00:22:01.067 As personally, I've been working in more SAP projects than I would like to admit here. 00:22:01.227 --> 00:22:03.307 I can totally see that. 00:22:03.467 --> 00:22:08.607 But when I now think about the logic that we used there back in the days 00:22:09.647 --> 00:22:14.107 and the teams you've been talking about doing their administrative stuff, 00:22:14.107 --> 00:22:21.587 which would be quite a picture book example of being replaced by AI agents. 00:22:22.187 --> 00:22:29.487 I get to think that you would not only need to re-envision the software, 00:22:30.067 --> 00:22:36.927 but you'll also need to re-envision at least in part the companies because there'll 00:22:36.927 --> 00:22:41.587 be a lot more of automation, especially in administrative duties. 00:22:44.156 --> 00:22:52.156 Yes, 100%. And I do not think that this is going to be a zero to one shift, right? 00:22:52.716 --> 00:23:00.016 If you look at, for example, a very clear example of the migration push of SAP 00:23:00.016 --> 00:23:04.296 on-prem to SAP HANA that SAP is pushing massively, 00:23:04.476 --> 00:23:09.536 some of these companies actually spend a very, very significant amount of euros 00:23:09.536 --> 00:23:13.276 and very significant amount of time, meaning years. 00:23:13.396 --> 00:23:19.556 To go from the concept of understanding what the existing on-prem setup looks 00:23:19.556 --> 00:23:24.116 like from the perspective of what's standard SRP code, what's customer SRP code, 00:23:24.556 --> 00:23:27.336 how, for example, the business logics look like, 00:23:28.096 --> 00:23:33.116 all of these things, hire a bunch of consultants, kind of try to map out exactly 00:23:33.116 --> 00:23:35.216 how this should look like in the cloud. 00:23:35.496 --> 00:23:38.996 It doesn't just work in a way that you buy a virtual machine and you just push 00:23:38.996 --> 00:23:42.336 it there within a week, but you actually have to go through this entire process 00:23:42.336 --> 00:23:44.876 And then pretty much you try to move the application. 00:23:46.276 --> 00:23:51.976 Now, from my perspective, technologies that can, on the one hand, 00:23:52.556 --> 00:24:00.236 speed up this type of process, as well as think about how these workflows can 00:24:00.236 --> 00:24:06.996 be fully automated from, let's say, an agentic perspective, will need to emerge in parallel. 00:24:07.396 --> 00:24:11.416 Because you cannot just throw an agent pretty much at an on-prem SAP instance, 00:24:11.596 --> 00:24:13.176 right? I think it's very, very clear. 00:24:14.056 --> 00:24:19.736 So you will need very different approaches. And ultimately, what will unlock 00:24:19.736 --> 00:24:23.516 the most value will have the most grip on the market, as we have seen also in the past. 00:24:23.656 --> 00:24:29.036 There is no absolute clear cut answer what type of approaches will win. 00:24:30.136 --> 00:24:32.296 But ultimately, I think it needs to be, 00:24:32.927 --> 00:24:35.187 game of parallel approaches, to be honest. 00:24:36.367 --> 00:24:42.007 And what you've been talking about is on-premise, basically more or less very simplified. 00:24:42.027 --> 00:24:45.407 You had a very big data center. 00:24:45.807 --> 00:24:51.527 You're running SAP there just for your company. And now it's moved on HANA into the cloud. 00:24:51.667 --> 00:24:54.607 Very, very much simplified. And that was already a big project. 00:24:54.847 --> 00:25:00.647 But the more I think about using AI agents in such a tool, 00:25:00.647 --> 00:25:06.627 I always get the idea that the most successful companies or the most successful 00:25:06.627 --> 00:25:11.487 software in the future may not be the fastest AI agent, 00:25:11.627 --> 00:25:19.207 but I do get the one who makes it the easiest to administrate those agents, control them, 00:25:19.707 --> 00:25:22.007 give them duty and keep them in check. 00:25:22.007 --> 00:25:28.267 Because if you do, what I have in mind are those huge Excel sheets where you track stuff. 00:25:28.407 --> 00:25:33.047 And then at one point, you don't realize that this agent is doing A, 00:25:33.247 --> 00:25:37.647 this agent is doing P, and they're basically just giving each other work. 00:25:37.787 --> 00:25:43.387 So there is a new way how you need to think about a company getting back to 00:25:43.387 --> 00:25:46.367 the idea of rethinking the company. 00:25:47.547 --> 00:25:51.787 But we've been a little bit intertwined already into AI. 00:25:52.007 --> 00:25:56.987 So I was wondering, we're talking to your VC, what is your framework to identify 00:25:56.987 --> 00:26:04.067 AI startups with like a real differentiation and they don't necessarily have just buzz? 00:26:05.867 --> 00:26:12.747 Yes, that's a really good question. So I'm especially speaking from the perspective 00:26:12.747 --> 00:26:16.347 of a pre-seed seed investor, which is a little bit of a cheat card sometimes 00:26:16.347 --> 00:26:19.407 because you can always give the answer that the founder has to be exceptional. 00:26:19.407 --> 00:26:23.267 Which in itself, on the one hand, can be a really good answer. 00:26:23.467 --> 00:26:28.107 On the other hand, I completely agree that if you look at many of the verticals 00:26:28.107 --> 00:26:30.467 you see right now in agentic AI, 00:26:30.867 --> 00:26:35.227 you do see an absolute red ocean of parallel approaches, let's say when it comes 00:26:35.227 --> 00:26:39.647 to the number of AI legal tech companies or the number of companies that are 00:26:39.647 --> 00:26:43.867 trying to build your AI SDR and so many of these different approaches. 00:26:44.687 --> 00:26:47.727 From our perspective, the two things we... 00:26:48.654 --> 00:26:53.314 Pre-seed, ultimately, and early-stage investing, in a really simple, 00:26:53.514 --> 00:26:59.934 simply put way, is a really, truly excellent founder building in an incredibly exciting market. 00:27:00.434 --> 00:27:04.894 And the incredibly exciting market is pretty much a given, in many cases, 00:27:04.954 --> 00:27:08.114 when you are looking at the opportunity of the technology and what you can see 00:27:08.114 --> 00:27:09.594 in many of these use cases. 00:27:09.594 --> 00:27:15.054 Now, ultimately, the exceptionality of the founder is something that we pay exceptional, 00:27:15.394 --> 00:27:21.454 like really, really big attention to, because that's where you can identify 00:27:21.454 --> 00:27:26.354 somebody who will be able to navigate the, let's say, the level of uncertainty 00:27:26.354 --> 00:27:28.834 that you will need to navigate in this space. 00:27:28.834 --> 00:27:33.794 And if you look at just the simple acceleration of the last two to three years 00:27:33.794 --> 00:27:39.394 when it comes to what capabilities, for example, AI can do, this is one topic 00:27:39.394 --> 00:27:40.874 we have been discussing with the founder, 00:27:41.174 --> 00:27:47.994 is that, for example, if you look at some of the, let's say. 00:27:48.754 --> 00:27:52.494 Features that, I don't know, some of these foundation models could do, 00:27:52.594 --> 00:27:55.974 for example, writing a poem or something like this that are absolutely not spectacular 00:27:55.974 --> 00:27:59.834 today, almost to anyone who has been natively using these AI tools, 00:28:00.074 --> 00:28:06.334 back then the amount of wow effect that you got from them was 100 times higher 00:28:06.334 --> 00:28:08.334 than what you get from now. 00:28:08.774 --> 00:28:13.574 So from our perspective, from a human perspective, human experience perspective, 00:28:13.894 --> 00:28:19.594 what we see is that we get used to the power of the technology incredibly fast. 00:28:20.274 --> 00:28:24.194 And we just forget how much progress has been made in the last two to three years. 00:28:25.214 --> 00:28:28.414 And I think personally that we completely underestimate 00:28:28.414 --> 00:28:31.314 how much this technology will develop in the 00:28:31.314 --> 00:28:35.434 coming years and because of that there is 00:28:35.434 --> 00:28:38.194 a very high level of uncertainty that a certain 00:28:38.194 --> 00:28:41.074 founder needs to navigate so ultimately as a pre-seed or 00:28:41.074 --> 00:28:43.794 seed investor trying to identify if you have a level of 00:28:43.794 --> 00:28:46.754 tech defensibility as a startup that just developed an 00:28:46.754 --> 00:28:49.694 MVP is not a 00:28:49.694 --> 00:28:53.094 very valid question right so for us the focus 00:28:53.094 --> 00:28:56.134 really really shifts very much to the exceptionality 00:28:56.134 --> 00:28:59.194 of the founder which in itself can lie into for 00:28:59.194 --> 00:29:02.314 example unique insights to a certain industry because as 00:29:02.314 --> 00:29:07.274 discussed already for example in europe when you still have the challenge of 00:29:07.274 --> 00:29:12.734 for example needing to sell to some customers um in person or do field sales 00:29:12.734 --> 00:29:16.494 for example let's say in construction tech or industrial tech a founder that 00:29:16.494 --> 00:29:19.414 is able to understand on the one hand the capabilities of AI, 00:29:19.654 --> 00:29:23.114 but also understands the particularities of the industry, is the combination 00:29:23.114 --> 00:29:25.134 that makes them exceptional, right? 00:29:25.334 --> 00:29:29.934 And this is something that we always try to look at from a perspective point of view. 00:29:31.874 --> 00:29:37.974 I see. We'll be back after a short ad break and then talk about how you do your 00:29:37.974 --> 00:29:43.234 investments, how, for example, you evaluate a founder, and so on and so forth. 00:29:48.771 --> 00:29:52.031 Hey, guys. Thank you for being back with us after the short ad break. 00:29:52.471 --> 00:29:58.491 I'm still talking to Martin Partner at Visionaries VC, and we are talking right 00:29:58.491 --> 00:30:02.151 now about how they evaluate the founders. 00:30:04.911 --> 00:30:12.451 What traits do you think define a genre-defining founder in your eyes? 00:30:13.211 --> 00:30:20.051 Yes, this has been an exercise we have been constantly thinking about and re-challenging ourselves on, 00:30:21.891 --> 00:30:26.431 especially if you look at the really exceptional founders in Europe and how 00:30:26.431 --> 00:30:31.851 serendipitously they came out of absolutely unexpected hubs, times, and setups. 00:30:33.111 --> 00:30:38.291 We definitely don't think that you have a very strong ability to put together 00:30:38.291 --> 00:30:42.391 a checklist and just tick boxes and give an average score. 00:30:42.611 --> 00:30:45.271 And if somebody hits that average score about a certain level, 00:30:45.411 --> 00:30:47.211 then you invest. If not, then not. 00:30:47.831 --> 00:30:53.051 So, for us, exceptionality can come in very different forms, 00:30:53.071 --> 00:31:00.011 and we have certain traits that we usually look into that can feed into certain 00:31:00.011 --> 00:31:02.671 exceptionalities in founders in very different ways. 00:31:02.671 --> 00:31:10.871