Getting off the ground
What does it take to turn a good business idea into a successful startup? LMU students who are thinking of starting their own businesses can count on the University’s support.
Manuel Stöffler and Michael Ziegler, the founders of Grillido, had just presented their business concept to the jury of investors on the TV show “The Lions’ Den”. Their idea – to produce and sell a protein-rich sausage – had impressed one jury-member so much that he was willing to put money into the business. But Stöffler and Ziegler calmly rejected the offer: “We had agreed in advance that we would not accept a deal in the range that was on offer – and we stuck to our guns,” says Michael. The rejected suitor, entrepreneur Frank Thelen, had offered to put 100,000 euros into their brand-new startup – in return for a 20% stake in the firm. Grillido’s initiators were not impressed – and turned the offer down.
The advertising effect
For Florian Rickert of LMU‘s Entrepreneurship Center, which had advised and supported Manuel and Michael in the development of their business model, the decision to refuse the offer was a wise one. Grillido is just one of approximately 185 startups that have so far profited from the counseling services provided by the Entrepreneurship Center – which include firms such as FlixBus and Polarstern. Fifteen new startup teams per semester are selected for support. This enables budding entrepreneurs to work out relatively quickly whether or not their business model has a fighting chance. “We assist startups by coaching their founders, providing expert input, and putting them in contact with investors. We have built up a very broad network of contacts in a wide variety of business sectors, and our clients benefit from our years of experience in setting startups on the feet,” as Andy Goldstein, the manager of the Entrepreneurship Center, explains.
“The primary impact of shows like ‘The Lions’ Den’ lies in their role as marketing tools,” Rickert points out. They do not provide the right sort of forum for attracting venture capitalists to invest in the startups presented. But the advertising effect can be quite powerful: “By rejecting the 100,000 euros, the founders of Grillido garnered an enormous amount of publicity for the firm. But I would probably advise startups in the business-to-business (B2B) sector not to take the same route.” Grillido‘s Manuel and Michael agree wholeheartedly with Rickert’s assessment: “Our appearance on ‘The Lions’ Den’ was invaluable for us – above all, because it brought the sausage revolution that is underway in Germany to the attention of a much wider public,” they say. And Rickert goes on to emphasize that there are much better ways budding entrepreneurs can use to attract serious investors – for example, LMU’s Cashwalk, which brings together 50 startups and 70 potential investors.
From student startup to thriving business
Indeed, there are plenty of cases in which clever ideas developed by small teams of students have blossomed into successful startups. Probably the best example is the bus company FlixBus, which now serves long-distance routes all over Europe. Jochen, André and Daniel founded the firm in 2009. The idea was born in a bar near the university, and the founders’ first “office” was the Entrepreneurship Center at LMU. “Particularly in the early phase, we received lots of useful advice and tips, both in relation to the idea itself and how we should go about realizing it,” they recall. “LMU has assembled a network of experts and contacts to investors, and it was the perfect place for us to get the firm up and running. In addition, our exchanges with other startups were a great help, and we still maintain the contacts we made at that time.”
Veronika Schweighart graduated in Business Studies last year, and her startup Nuclino is still in the starting block. Together with her colleagues, she has designed a tool that facilitates collaboration by making it easier for teams to locate and share information, thus enabling them to trace the development of their ideas and keep track of where they stand. The road to success doesn’t always run smooth, sighs Veronika: “At the outset, every workday in the firm consists of a sequence of hypotheses, which have to be properly framed before they can be reliably tested. And only later does one learn which of the ideas or strategies we consider is actually practicable and appropriate for our own firm.“ But then again, that’s what makes the entrepreneur’s job so exciting and instructive.
Start off while studying
It’s also one reason why Florian Rickert advises potential company bosses to make use of hands-on formats such as App@Night: They give one a good idea of what the first steps on the way to one’s own firm actually involve, he says. “This kind of event provides an ideal setting in which to generate your own business idea, and most participants end up working in interdisciplinary teams,” he adds.
For Timo Fischer this approach certainly paid off. Together with Florian Holy, Fischer founded the startup BAM Original, which provides workshops on building one’s own bicycle – out of bamboo – an idea that won them the coveted Eurobike Award (also known as the “Bicycle Oscar”). The pair met in 2014 during LMU’s “5 Euro Startup Competition”, and a short time later they had put their first bamboo bicycle frame together in the cellar of the building where they both lived. “Looking back, the whole thing still strikes me as absurd,” says Timo. “A student of physics teams up with a student of design, and together they try to set up a business. In the early days, we made a monumental mess of things like tax returns.” Nevertheless, he says, starting a business while studying was a very good idea, because he and his partner were able to work on their idea without any financial pressure.
In the 5 Euro Startup Competition students are challenged to come up with a business idea over the course of a single day, and then spend a full semester developing the idea and getting acquainted with the whole process of transforming the idea into a convincing business plan. Laura Janssen OF LMU’s Office for Research and Technology Transfer is responsible for organizing the competition, together with her colleague Michael Kriegel. The phrae ‘5 euros’ is to be taken literally: Each startup receives 5 euros as starting capital. – Timo and Flo, the founders of BAM Original, spent the money on their first batch of bamboo seeds. “Of course, the 5 euros are essentially symbolic,” Janssen says. “What we want to do is encourage participants to focus on creativity, on refining and extending their ideas rather than on investment capital. Founders who wish to exploit research-based findings, possess specialized know-how and plan to set up a spin-off can always turn to the LMU Spin-off Service for advice and guidance.”