00:00:05:15 - 00:00:22:00
Sarah
Hello and welcome to a special edition of the IAA Mobility Visionary Club. Today we are talking about what startups and corporates can learn from each other. And to do that, we've brought together a startup and a corporate. Let me introduce you to our two guests or better yet, I'll let you guys introduce yourselves. Nico, you go first.
00:00:22:22 - 00:00:30:00
Nico
Thanks. Yes. Thanks for having me, Sarah. My name is Nico. I'm from Vathos and we build software for industrial robots.
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Sarah
All right, very cool. Robots are always a good thing. And you're representing the startup position. To my right, Michael, you're representing the corporate position. Tell us about yourself.
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Michael
Yes, I'm Michael, I'm head of open innovation at Schaeffler. We're an automotive and industrial supplier.
00:00:44:18 - 00:01:00:24
Sarah
All right. Very cool to keep things "kurz und knackig", as the Germans like to say, short and sweet, we're going to put 30 seconds on the clock and I'm going to cut you off after 30 seconds. And I do mean I am going to cut you off. There will be a loud, unpleasant noise. So short answers. Guys, are you ready?
00:01:02:21 - 00:01:03:05
Nico
Thank you.
00:01:03:15 - 00:01:11:09
Sarah
You're going first? Ah, Michael, I love the enthusiasm. If you can solve one challenge of working with startups immediately, what would it be and why?
00:01:12:12 - 00:01:38:00
Michael
I think that would be getting rid of this open of this "not-invented-here-syndrome". In the management consulting world external voices are often trusted more than the internal opinions. But in R&D it's the opposite. Internal solutions are trusted more and this needs to change. I think we need to have more faith in startup technologies because they offer great potential for innovation.
00:01:38:04 - 00:01:51:13
Sarah
All right. We'll end on innovation. Very good. You almost made it in under 30 seconds. Oh, nice. Good. It's hard to go first. Yeah. Okay. Same question to you, Nico. If you could solve one challenge of working with corporates immediately, what would it be?
00:01:52:17 - 00:02:07:14
Nico
So one challenge is always time. So we have to move very quickly and if I had a wish, I would always in the context, working with the corporates, it's to reduce the time, for example, of the decision making and also of course for many processes.
00:02:07:23 - 00:02:17:13
Sarah
So be faster. Exactly. Nico was saying be faster. What's your wish from startups and where do you see room for the improvement in the collaboration process? Michael.
00:02:17:23 - 00:02:39:00
Michael
I think especially for young startups, it would be really nice if they had some experience in working together with corporates, and that's why I'm always suggesting to get hold of an experienced corporate mentor that introduces them to into the process as to how to approach strategic partnerships and projects with corporates.
00:02:39:04 - 00:02:53:14
Sarah
Okay. So look for a mentor who knows what they're doing, who can kind of help guide you. To what extent do startups need to adopt in order to successfully collaborate with more established companies? I'm asking you to sort of look inward, but also at your fellow startups, what work needs to happen there.
00:02:54:12 - 00:03:13:01
Nico
So where I think the startups need to have a clear plan how to work on a specific problem together with the corporates. So don't think that the corporates comes over to you and make everything for you. So you have to and need to have a clear plan and a clear strategy and communicate.
00:03:13:02 - 00:03:21:03
Sarah
A clear plan. Clear strategy. Sounds good. How can corporates adapt to the new world that we're in?
00:03:21:19 - 00:03:39:15
Michael
I think it's important for them to adapt this open innovation approach. That's what we're doing. We're working together with many universities, many startups and that really helps us to get into new technology topics and gets innovations into the market faster.
00:03:40:01 - 00:04:00:12
Sarah
Wow, you guys are good. We have not had to use that alarm once. Short and sweet. I love it. Now you can relax. You've run the gauntlet. We can have an open discussion here. We'll turn the clock off for a minute. Let's talk about technology start-ups, something that you brought up. How challenging is it for technology startups in this environment in Germany right now?
00:04:00:12 - 00:04:19:19
Michael
I think it's not more difficult in Germany than in other parts of the world, to be honest. We have increasing number of startup incubators. We have an increasing number of angel investors and investment funds. So I think the environment for startups is getting better in Germany, right now.
00:04:20:01 - 00:04:24:14
Sarah
So the environment is getting better. That's the corporate view. Do you agree? Is the environment getting better?
00:04:24:14 - 00:04:55:13
Nico
Somehow, I agree. So of course we have a very good stable environment, many accelerators, digital hubs and also in the society there is a good attitude towards startups. So everybody knows famous TV shows like where the guys pitch and so on. But compared to example to the US it's definitely a bit different. So there you get money for a good idea, but we have to really proof our business model and also our product.
00:04:55:22 - 00:05:02:20
Nico
So yes, it's getting better, but we have still some obstacles to to build up really quickly in startups.
00:05:02:24 - 00:05:28:14
Michael
But I guess these entry barriers are not that bad, isn't it? I mean if money were would be thrown after each and every idea, many startups would pursue ideas that that might not work anyhow and I've got the impression that ideas are checked very well here in Germany before somebody is invested in and if the idea is good and you also get the money and so that probably selects the good from the maybe not so good startups quite early on.
00:05:28:14 - 00:05:32:04
Michael
So I think it's not a particularly bad situation.
00:05:32:16 - 00:05:40:11
Sarah
Do you agree or are German startups just at a disadvantage because the money is less and it's less willing to be quick when you need it most?
00:05:41:16 - 00:06:16:09
Nico
Somehow I agree because it's... So, the money is spent very efficiently if it's in the working business model and you have definitely some prototyping or some things or product which is really working. But for example, especially in the deep technology you need somehow large scale, big time frame until you can prove your benefit of your product. So and this is therefore you need somehow a big amount of money and in other countries, it's definitely for the deep technology can raise money much more easily.
00:06:16:09 - 00:06:17:21
Nico
From my point of view.
00:06:17:21 - 00:06:33:01
Sarah
We're headed into what looks like an economic downturn, is having to have that proof of concept that so many German VCs want to see in some ways, an advantage? To say, hey, it is good to kick the tires before you throw a bunch of money at it. Is that perhaps a benefit?
00:06:33:03 - 00:06:50:24
Michael
Definitely, yeah. It gives you a lot of credibility if you have a proof of concept with a big corporate. And if that was successful, you might even get multiple sources of funding. The corporate might decide to invest as well. So I can strongly recommend to every startup to approach corporates and to get this proof of concept done.
00:06:50:24 - 00:07:09:12
Nico
Yes, definitely. So working with the big corporates always gives you really the assurance that you that your product is working. So we have the proof of concept and the proof of your products, the product market fit and this is the guarantee that you get also some money at the market. Okay, definitely.
00:07:09:24 - 00:07:21:16
Sarah
I think we've talked too much. We need to reduce our answers now to 30 seconds. We're going into another lightning round. Quick answers, quick questions. You guys up for it? Yes. All right. Here we go. Who's going first? Who went first last time?
00:07:21:17 - 00:07:22:20
Nico
It's no matter.
00:07:22:20 - 00:07:29:19
Sarah
Your turn to go first. All right, Nico, how do you successfully establish a collaboration with large international corporations? Where do you start?
00:07:30:15 - 00:07:51:09
Nico
Good question. So, how to get in contact with BMW, Schaeffler and so on? So, I would recommend always to start with an accelerator or an innovation hub because they have to linkage to the different corporates and by that they come over to with a specific problem and you can solve or help them to solve this problem.
00:07:51:09 - 00:07:57:18
Nico
And by that it's much more easy to just instead of just picking up the phone or writing an email. So.
00:07:58:18 - 00:08:08:19
Sarah
Okay, you brought it to the wire. To the wire. 30 seconds. How important is partnering with startups for corporates? Is it something you could just actually do without? You don't need it?
00:08:10:03 - 00:08:27:02
Michael
Not anymore. We used to in the past, but the benefit of working together with startups is that they absolutely fearless, most of them anyway. And corporates are really risk averse and you have to bring these both fuzed together to enable these groundbreaking innovations.
00:08:27:19 - 00:08:31:10
Sarah
All right. Well, under 30 seconds, maybe you've practiced that answer?
00:08:31:10 - 00:08:34:08
Michael
I made that mistake once, the first questions, I learnt from it.
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Sarah
Learning from your mistakes. That is great advice for startups and corporates alike.
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Nico
I can beat that.
00:08:39:22 - 00:08:46:03
Sarah
All right. You can beat - I love the spirit of competition we've got going here, guys. Where in the industry do you see your company in the next decade?
00:08:46:21 - 00:09:08:11
Nico
So of course, I wish that in the next decade a big proportion of industrial robots will use our computer vision interface and then we see back, so maybe we helped, especially our automotive industry, for instance, to conquer their competitive advantage. That would be good.
00:09:08:15 - 00:09:14:05
Sarah
All right. That sounds that sounds good. Michael, what about you? Scheffler has been around for a long time. We'll still be here in ten years. And what will you be doing?
00:09:14:09 - 00:09:36:09
Michael
What I hope we're still around in ten years, we made the transition from a parts supplier to systems provider in the past ten years. And I think the next big push in the next ten years is to become sustainable and to offer CO2 neutral products. And that's why we are focusing a lot of our development efforts towards renewable energy, energy storage and hydrogen technology.
00:09:36:15 - 00:09:47:08
Sarah
That's exciting. The future is sustainable. Give me an outline for an ideal collaboration between startups and established corporations in 30 seconds. No pressure.
00:09:47:15 - 00:10:10:12
Nico
It's definitely difficult. So I think the most important thing is that corporates and startups work in a team together on a real problem, so no academic exercises, a real problem which is beneficial and that you can turn into money and also a problem which you can scale. This is somehow the most important thing.
00:10:10:14 - 00:10:17:16
Sarah
Okay. And same question to you. How would you draft the ideal collaboration structure between startups and corporates?
00:10:17:24 - 00:10:41:05
Michael
Yeah, I don't think there is the ideal collaboration model. We adopted this venture client approach and focus on proof of concept to begin the collaboration. And then we decide on a case by case basis and how to progress, whether it's a customer supplier relationship or a development partnership, minority investment or whatever. So yeah, it's really a case by case decision in each case.
00:10:41:10 - 00:10:43:06
Sarah
So there is no one perfect model?
00:10:43:13 - 00:10:45:06
Michael
No, there's no one fits all model, no.
00:10:45:09 - 00:11:02:11
Sarah
Okay, fair enough. Guys, you've been such great sport sticking to the 30 second limit. I have barely had to cut you off at all. Well done. We can relax a little bit. And maybe for the last question, just dig in a little bit deeper. And I want to ask you guys, what role do startups play in pushing these innovative topics forward?
00:11:02:13 - 00:11:05:14
Sarah
What what's their role? Let's start with the startup perspective.
00:11:06:14 - 00:11:32:12
Nico
So from my point of view, so many of the founders, for example, come from the academic area. So and from my point of view, they are dealing all the time with this research and now they have the rows to use this research to build a product around and push it into the markets. So hence, from my point of view, startups are very crucial to us to establish new products, new innovation in the market, and bring them into the market.
00:11:32:18 - 00:11:35:16
Sarah
New products, new innovation. How do you see it?
00:11:36:04 - 00:12:01:23
Michael
Yeah, I think it's important for startups to realize these crazy ideas that they have and to make the mistakes so corporates don't have to make them themselves. Because as I said before, startups have this fail often, fail fast approach and coporates can't adopt that. It's not possible within these structures. That's what we need the startups for and that's also why we finance startups to do that for us.
00:12:02:19 - 00:12:19:03
Michael
So for me, it's absolutely crucial for startups to generate ideas and to prepare disruptive innovations and for corporates to follow that up by cooperating with startups in the late stage.
00:12:20:02 - 00:12:25:02
Sarah
How do you envision the importance of startups growing in the field of innovation? Where are we headed?
00:12:26:19 - 00:12:52:07
Nico
Well, I think startups are very important for this field. So from from my point of view, they bring this innovation, they build these products, bring it into the markets. It's somehow the most important thing. So and in addition, as Michael said, it's very important they can think out of the box and they can do it in an agile way, fail fast, that's exactly the same thing.
00:12:52:08 - 00:13:01:23
Nico
So we are not a coroprate. We do not have to stick to certain procedures and so on. So we are more free to think out of the box. And this is the key driver for innovation.
00:13:02:06 - 00:13:07:21
Sarah
Think outside of the box. Fail fast. Do you see the importance of startups growing in the field of innovation?
00:13:08:22 - 00:13:34:08
Michael
Yeah, absolutely. I mean, startups need to grow in order to become a viable business and most of them lose money at the beginning. And the founders can hardly live from the the money that they make. So growth is absolutely important in the early stages, but I think corporates need to help startups to grow. It's very hard for startups to grow by themselves, especially in the automotive industry.
00:13:35:04 - 00:13:50:19
Michael
So that's why we are actively participating in the startup ecosystem to help them and to realize the next big innovations, because that's to secure Germany as an industrial nation, really.
00:13:51:16 - 00:14:06:12
Sarah
There's a lot at stake. It's also why we're having this conversation to bring startups and corporates together and talk about what you can each learn from each other, how you can better collaborate and ultimately push innovation forward. Michael, Nico, thank you both for being here today and thank you for being such good sports with the quick answers.
00:14:06:14 - 00:14:07:03
Michael
Well, thank you.
00:14:07:13 - 00:14:08:04
Nico
Thank you, Sarah.
00:14:08:16 - 00:14:24:03
Sarah
It's a pleasure to have you. If you enjoyed this episode of the IAA Mobility Visionary Club, check out our other chats. We're talking to industry experts, tech leaders and key stakeholders about what's next in the field of mobility. I'll see you next time.
