What I’ve learnt as portfolio entrepreneur

I've learnt a lot as portfolio entrepreneur in ten years – what I'd repeat and what I'd do better!

The most important thing is to dare to think a business idea, no matter how strange or impossible it is and not to let family and friends prevent you from realizing this idea.

Some years ago I thought that Internet-based business ideas could be incorporated everywhere, also in Austria. That's why I helped to incorporate some companies in Austria. I had to become 50 years old to realize that this is not true. Austria is behind in Europe and Europe is miles behind the USA. That's the second thing I've learnt.

And the third thing is that everything I learn from startups is needed in existing companies as well. That's what I want to share.

Unfortunately many companies lag so far behind and are so inflexible that I lack patience to position and market them accordingly.

And I don't want to be a typical consultant who maximizes the number of days and the day-rate, but is not interested in solutions. This maximizes the profit, but is boring.


What Austria can learn from the Silicon Valley

In Austria, you meet ten persons who give you ten reasons why your startup won't work.

It's 100 to 1 and you are the loser as entrepreneur before you have even started

You have to justify – not only your business idea, but generally why you even put those around you to this strain when there would be easier and more profitable ways to earn money, why especially you think you will be successful when everybody knows that the dropout rates are enormous, etc.

In Silicon Valley you meet ten persons and everybody starts thinking and asks, gives hints and offer their contacts. Of course you have to present something, otherwise you don't have a chance there – I've learnt the hard way as well. But generally, the start is supportive and inspiring.

In Austria you are a weirdo, in Silicon Valley you are part of innovation.

If you fail in Austria, you are stigmatized all your life,
if you fail in Silicon Valley, everybody knows that you have learnt and of course you get another chance.

In Austria it's complicated to found an enterprise, it takes a long time and costs a lot, even if the share capital for it has been reduced.

In Silicon Valley I can found a stock corporation with ten million stocks for no more than 1000 $ within a week, there are lawyers who defer payment for months and take the risk, and there are banks which do not charge fees.

So, while I found one LTD in Austria, I can found ten stock corporations in Silicon Valley at the same cost in one third of the time.

Of course companies need working capital, but it's a difference if I put money into my product and into market development or into taxes and duties.

That's why I only incorporate startups in Silicon Valley any longer. This year, I've already incorporated seven companies in Palo Alto; until the end of the year it will be at least ten, until mid 2014 at least 20.

An important hint if you fly to Silicon Valley: avoid the Austrians over there! It's okay to drink a glass of beer together and complain about the lack of wholemeal bread and prosciutto, but that doesn't help your startup.


Why it’s exciting to work as a business angel

To be honest, I do not feel to be a business angel, but rather a portfolio entrepreneur. I am always on the same side as the entrepreneurs, I bring in everything I know and master.
That's the kick I need: to
  • innovate
  • create
  • advance
  • influence
And I have to do that with various startups at the same time, because otherwise I get bored. And the idea behind the startup has to be something that
  • makes the world better
  • can grow quickly all over the world and
  • adds value for the customers.
Join us!


Why Silicon Valley is so attractive

Most people from existing companies flying to Silicon Valley have the tourist approach. And those who stay at home think that everybody in Silicon Valley is waiting for startups and is immediately offering a suitcase filled with money

Of course it's good and important to visit Facebook, Google and Apple, but it is much more exciting to pitch in the nearest Starbucks or to visit an event to discuss with other entrepreneurs and investors.

For me, Silicon Valley means:
  1. innovative climate: talk to everyone, collect feedback, get to know people
  2. large, open, technology savvy market
  3. a lot of potential partners close by
  4. a lot of investors, but also a lot of competition for the money
  5. easy, cheap way to incorporate enterprises
Each entrepreneur should go to Silicon Valley at least once a month to understand what it's like.

I can't explain that, you have to feel it.


What money means for entrepreneurs and business angels

I think that it's the wrong impetus to want to make ever more money. This also concerns many business angels. Most of them are not interested in the startup being able to realise their business idea, but in the startup making money quickly so that they can multiply the invested money.
Many so-called business angels in Austria prefer talking to acting. Some invest ridiculously small sums (e.g. 5,000 Euro – but this amount is notarized and collateralized with the private funds of the founder), others are a nuisance, because they constantly give input without understanding much, some negotiate for weeks and block the startup, because they insist on an assessment and as many shares of the company as possible. This assessment is just not possible at such an early stage.
Hardly anyone can imagine that it can be difficult for a startup to get 1,000 Euro. I often hear, "well, ask your granny then" - but the granny has already given her money and this money has been spent.
I think that more and more people will provide their knowledge and know-how without asking for money immediately, who are ready to take risks and chances.
Just think of all the old age pensioners whom the classical companies want to get rid of, who do not need money, but recognition, a useful occupation, a chance to put in their experience.
Think of the digital natives who want to do their own thing and only need very little money to be able to live, who do not see any reason to know at the age of 25 when they will be able to retire with how much money if only they stick to the system until then.
I think that most salaries today are a mixture of a compensation for pain and suffering and hush-money. And ever more people don't want that any longer: they do something else – voluntarily; or not voluntarily, because they suffer from burn-out.

business angel associations and awards

I don't like business angel associations where the business angels discuss in expensive hotels over a glass of champagne with each other and a few startups are allowed to present in the afternoon. This somehow reminds me of the gladiatorial combats in Ancient Rome or the kings and their entertainers in the Middle Ages.

And I do not like the startup events where a jury elects the best startup. The jury consists mostly of employees of the companies which pay the bills for the event. Critical are also huge events with papers and discussions. It is a logistic masterpiece to provide food and drink for a lot of people, but the entrepreneurs do not really profit. In many cases they have to pay entrance fees and have lost a few important days. It is not very likely that they find THE investor at such an event; or that you get the decisive idea for your own startup.

Why I am a portfolio entrepreneur

In the early 1990s, I was CIO at VA Tech AG and responsible for IT, Internet and e-commerce worldwide. This was interesting and I don't want to miss this stage in my career.
But I am not the corporate type. In companies,
  • Things are too slow
  • You have to show too much consideration for the structures and processes that have developed over the years and have influenced the company culture
  • Corporates are good in operation, not in innovation
  • There are informal power structures 
I have the impression that the larger the company the more it's about power, not the cause.

My career had various stages before VA Tech. I stayed everywhere as long as I had the feeling I could add value to the organisation. 

When that was not possible any longer or got too difficult I moved on.

I always felt more as entrepreneur,
I always worked as if it was my own company – even as employee.

My inner notivation is curiosity. 

I am as curious as a child. And – like children – I can be as excited about small things.

Many people are not curious any longer at my age. I think that's a pity!

Over time, I love to work with startups at super early stage; and I love to work with more of them in parallel!
My portfolio of startups is growing, and as entrepreneur i am a “portfolio entrepreneur”.

Why lecturing at university is exciting

As student of computer science I liked lecturers who could share their practical experience with us. I think that it's my turn now to share my experience. I also find it interesting that I can increase my network at Danube University Krems and that I get up-to-date when supervising master theses. It's giving and taking.