On February 12, 2015, Mirko Holzer of BrandMaker GmbH was welcomed as a guest at the KIT Entrepreneurship Talks. Holzer began a first attempt at founding while still at school. During his studies at the KIT (the University of Karlsruhe at the time), he was encouraged in his startup plans. He experimented with different ideas and is a successful entrepreneur and provider of a management system for the marketing industry today. Although Holzer “grew up” in the IT industry, his lessons learned are interesting for all founders:
- Take a risk: During your studies, the risk is minimal. Thus, it is the ideal time to found. As a student, you have a lower standard of living and generally no family obligations. The biggest risk is to take a risk.
- Don’t found alone: Founding is teamwork. Cofounders are useful in order to motivate one another and to complement different competencies. Several opinions from the team help in developing the startup idea and in solving problems. However, too many founders causes difficulties – Holzer recommends two to four people.
- Focus on a project: As a founder, you shouldn’t spread yourself too thin. Concentrating on one main project is more effective. If there are additional possibilities for development, you can gradually turn toward a project. Holzer advises to set development goals in order not to lose the focus.
- Bootstrap – but not for too long: Bootstrapping allows you to develop an idea entirely freely and in different directions in the beginning (up to 24 months). This makes the business grow more slowly but continuously. Through bootstrapping, you aren’t dependent on debt capital and don’t have to deliver business shares as quickly. However, once an idea has proved successful, external financing helps to speed up development.
- Don’t be afraid of difficult decisions: Founding is a development process where you don’t always make the right decisions. In the case of negative developments, it is possible that you need to make difficult decisions such as personnel cuts. In such situations, you should be able to make and support the decision in order to bring the business back on track.
- Be passionate: If you stand behind an idea or are convinced of the idea of a cofounder, you should do everything for its realization. This requires total commitment and hard work. Sacrifices must be made, such as not having a lot of free time, but the commitment can ultimately pay off.
For Holzer, IT is a special industry for founding, because you only need programming skills and relatively little financial means. For the development of IT startups, however, Holzer suggests the following financing strategy: Bootstrapping in the starting stage and business angels in the mature stage. This way, the founders receive know-how and network access for development from their “angel” in addition to financing. Holzer only sees venture capital financing as a means for late financing when the necessary, industry-specific “key performance indicators” can be gained from.
The talk with Mirko Holzer was a successful end to the event series for the winter semester. In the following summer semester, the Chair for Entrepreneurship and Technology Management once again organized the KIT Entrepreneurship Talks. We will keep you updated on the new dates and entrepreneurial personalities!