Mannheim – San Francisco – Berlin – Mannheim
Robert Reiz has set up shop with his firm VersionEye GmbH in the coworking space bauteil.b in MAFINEX. Anyone developing software today will most likely not be writing all the code himself. A lot is solved using programming modules, so called open source components. The components are free of charge but have licencing restrictions. For large companies, such as SAP, licenses that require a release of the source code are a no-go. Such companies need software to assure that their products are made up of whitelist components. Taking this fact into account Robert Reiz from Mannheim has set up his business model with VersionEye.
Good morning Robert! Back from Munich?
Indeed! I spent the day yesterday in WERK 1, the largest start-up center of the city. It used to be a plant for processing potatoes and was converted. One can still tell it used to be a factory – everything is a bit run-down and very industrial. It’s an old concrete building, almost as big as MAFINEX. What I really liked where the big kitchen spaces, with large tables for everyone. A great place to come together and keep in touch.
Was it easy reachable?
Yeah, it’s close to the east station and easily reachable by public transport. On the bottom floor they have a cafeteria just like in the Betahaus in Berlin. That is where you meet up and go forth into the coworking space. Aside from that they have small offices for start-ups and even an incubator for start-ups in the insurance sector. On the other end of the building there is a nightclub – so everything is well taken care of.
So we might be able to learn something from them?
I think so. Mannheim is a great place for founders, but I feel the ecosystem can still be improved. We don’t have any incubators and accelerators here yet for example. At the moment MVV is setting up an incubator for start-ups in the energy sector in Berlin. And I asked myself: why not in Mannheim? Berlin is not THE place in the energy industry.
What do you mean when you say incubator?
One or more firms set up a fond and put it out for tender, aimed at a certain fields such as energy, robotics or biochemistry. Then start-ups that fit the brief can apply and if they are selected will receive funding for a few months, free workspaces and a mentor for support. Normally these programs run for half a year with 5-10 start-ups. After this „incubation period“ the start-ups will receive follow-up financing or have to keep on independently. An incubator is always topicbased and privately financed.
Why do firms do this?
Large companies tend to have difficulties staying innovative. When people work a field for 30 or more years they become very rooted in firm structures and loose touch with pushing fresh ideas. The focus becomes stuck on the operational business. This is the reason the incubators are set up to get in touch with start-ups. In the best case a start-up will be integrated into the company.
Mannheim could have this as well – there are far more large and successful companies here compared to Berlin. The region has the ABB, BASF, Roche, John Deere, SAP and the Software AG! WE also have several universities and technical universities in the region that deliver a lot of brainpower! So why don’t we have any incubators that push innovation in the energy, chemical and software sectors?
And how does this work in WERK 1?
Several German insurance agencies set up the “InsurTech” incubator there. Start-ups from all over Germany can apply and can receive funding for six months. They get free workspaces, coaching from experienced experts and some cash. All in all that is worth about 50.000 Euros. The focus is on producing a viable product in the timeframe.
You are a founder yourself. How did things work for you?
I finished uni here in Mannheim in 2005 and spent a year working full-time as a software developer in a small start-up. Then I switched to freelancing as that was more lucrative. In 2008 I founded PLOIN GmbH.
What does PLOIN stand for?
Nothing really. I made it up. In 2010 I sold the company to Reutax AG, who created a spin off in San Francisco. I went along and had an executive position. I worked in Silicon Valley for a year to build up the company. Though as I didn’t see enough potential in the project later on, I quit and had to leave the US as I had an investor visa that was then negated.
I guess. It was fun and all, but also very expensive. And while a tourist will see the shiny surface, the longer you live there, the more you see the ugly side of things, the many homeless and other problems.
And after that you flew back home?
Yes, back to Mannheim. Which felt a bit small after a year in San Francisco. Though I had met someone from Berlin while I was in the US and visited him there. At first I stayed a week, but I noticed how much start-ups were going on there and decided to stay in Berlin from 2012 to 2014. It was in Berlin that I started operations with VersionEye GmbH.
I met a lot of relevant people in the start-up and VC area and also received my own investment. In the end though I didn’t feel Berlin was the right place for me, as everything there is very „business to customer“. If a start-up gets funding they blow a lot on marketing and PR and aim on making a name for themselves. Many of them initially aren’t looking to make money and are mainly trying to generate a lot of users to catch facebooks eye and be bough up. AKA business plan: hope.
What did you want to do differently?
I went my own way and focused on B2B (Business to Business) without trying to grow too fast. The investors in Berlin were not to keen on that. They were all about „user growth“ and not as much paying customers. Once my first investment had run its course and I couldn’t secure a second round of financing I had enough of it all, the scene – nothing but hot air and a lot of hype. Everyone there is constantly meeting up at start-up events, exchanging info, linking up on Xing and LinkedIn – in the end though all that won’t get you ahead. Back in Mannheim I stopped talking with investors and ignored all inquiries. What I wanted to do was focus on my product, which was much more rewarding than explaining my USP (Unique Selling Proposition) to the business crowd.
When did it pay off?
When I came back to Mannheim I was really down, almost broke. But I found two angel-investors from my circle of acquaintances that saw the potential in my B2B-product and kept me afloat financially for a few months. The I got my first inquiry from the XING AG in Hamburg. That was my first big enterprise customer. After that a big three-letter Brand from Waldorf approached me and became a client. I didn’t have millions of users but things were up and running. At the moment VersionEye has 42.000 registered users and every month 2.000 new registrations are set up. So now VersionEye has become interesting for investors from Berlin, but they can keep their money, I don’t need it anymore.
And Mannheim is a good fit for you?
I come from here, studied here, my family and friends are here. If I had grown up in Cologne I guess I’d be there now, as I am very attached to home. The Odenwald is great for mountain biking and the wine festivals are about to kick off! One on every weekend. You won’t find that in Berlin or Cologne.
Interview: Paul Heesch / bauteil.b
Pictures: Daniel Lukac