Ideas from Germany, innovatively marketed

On the wall, a drawing of Grand Central Station, on the desk, that classic on “The New Strategic Selling”: Stephan Herr­lich feels at home in his small office in Midtown Manhattan. For sixth months now, the managing director of Munich-based company IntraWorlds is working in New York to establish an American subsidiary in the city. IntraWorlds develops software that helps companies look for staff. “For us, the United States are the biggest market in the world,” explains the 36-year-old, “crossing the Atlantic was a logical step for expanding our company.”

Herrlich acquired the requisite know-how courtesy of the German Accelerator (GA) – a programme that prepares fledgling German companies for the American market. This private initiative, which is backed by the German Federal Ministry for Economic Affairs, was launched in Silicon Valley in 2011. The slots on the program are now so cherished that a sub­sidiary opened in New York in autumn 2014. A total of 12 start-ups per year will be receiving a three-month “US crash course” there. The figure for the West Coast is 24. The objective: To groom these novices for the kind of competition that is tougher than anything they have encountered at home.

German start-ups’ interest in people’s experience abroad is great – when the GA opened up in New York Florian Nöll, Head of Berlin-based Bundesverband Deut­scher Startups, the Federal Association of German start-ups, arrived with as many as 40 new entrepreneurs. “The German Accelerator can be of great assistance to start-ups,” he explains. This applies in particular to access to venture capital and large corporate clients. Nöll: “The American market is open to innovations and it is easier to find corporate partners than in Germany.” Such partners are important because small companies can grow more quickly with large customers – the piggyback effect.

“Germany should produce more global leaders,” is what Dirk Kanngiesser hopes. Together with a Munich-based innovation expert, Dietmar Harhoff, Kanngiesser was responsible for the idea for the German Accelerator. Electrical engineer Kann­giesser has been a venture capitalist for years now and has also established a large number of companies himself. Now, as CEO of the German Accelerator, he is passing on his experience. And his contacts. Indeed, the latter are key for German companies wanting to survive on the highly competitive American market.

Every start-up is allocated a mentor to help it fine-tune its business strategy, the former passes on his knowledge of the US market and brokers contacts to potential customers and backers. The GA’s pool includes old hands in Silicon Valley such as Tom Rice and Ram Srinivasan, partner of venture capital financers 
Wellington. IntraWorlds boss Herrlich was advised by Joseph Rhyne, an experienced technology manager. Rhyne secured Herrlich an appointment with 
the head of a Texas software company who now wants to come on board to distribute IntraWorlds’ products.

Moreover, at ‘boot camps’ the fledgling companies find out a great deal about marketing and sales, man management and the law. “In the States the conventions about how to draw up contracts are completely different,” admits Herrlich. Something at least equally important is the 
basics of intercultural communications. Herrlich comments that “it doesn’t take long to get a first meeting but such things do not last more than half an hour. The pace is faster than in Germany.”

Anybody can apply – at least any technol­ogy-savvy German company, as long as its product is relevant to the American market and it has sufficient resources to maintain a presence in two locations. After all, one thing that the Accelerator does not want is for German jobs to migrate to the United States. Ideally, this is a win-win 
situation. A good example is ParStream, 
a Cologne-based company, established in 2008 by three partners. This big data specialist took part in GA’s very first session in Silicon Valley. Shortly afterwards, ParStream set up a subsidiary in Cupertino where Apple is also based. And the team in Germany’s Rhineland – the place where the majority of software development is still conducted – has also grown. This is just the way that Dirk Kann­giesser thinks it should be – “What we want is for the start-ups 
to move their sales operations, not their R&D activities, to the States.”

Lovoo, the manufacturer of a chat app and a member of GA’s Class of 2013, may have a similar future. To date, this start-up is based in Berlin and Dresden but CEO Benjamin Bak is planning to cross the Atlantic in 2015 and considers himself well-prepared as he reports that “we learnt an amazing amount at the Accelerator.”

The fledgling companies have to pay their own travel costs and for accommodation, but attendance of the program itself is free of charge. It is financed by a grant of a good 2 million euros from the Federal Ministry of Economic Affairs. Moreover, large companies such as Siemens, Telekom, Allianz and Volkswagen sponsor the program. After all, one of its functions is 
“to bring together established companies and start-ups,” explains Federal Minister for Economic Affairs Sigmar Gabriel. He adds that it is noticeable in New York how traditional sectors – industry, advertising and finance – benefit from a symbiosis with the digital world.

Perhaps one day this support for start-ups will even evolve into a global network. There are, at least, plans to open up a branch office in Boston next year, with a focus on biotechnology and health. And for 2016 Kanngiesser can well “imagine testing the waters in China, too.”