„THERE IS MONEY HERE!“
INVESTOR MATTHIAS STORCH TALKS ABOUT STARTING UP IN MANNHEIM
His first startup didn’t work out, but his second attempt kicked off a successful career as a business angel. With his Good Brands AG Mannheim resident Matthias Storch invests in good ideas and brands — but he just can’t stop starting up himself. We met the man in the concept store of his lifestyle brand BUTIQ in Quartier Q 6 Q 7, to sit down for an interview, and talked about the thin line between success and failure, pesky elevator pitches, and how Mannheim is ahead of other start-up cities such as Berlin.
One can usually hear if someone is from Mannheim because of their slang. You sound quite dialect-free – why is that?
Indeed! I almost sound like I could be from the north of Germany. My parents are straight up Mannheimers though. In talk shows people from Mannheim tend to stand out due to the dialect, and I must say I’m glad that I don’t. When setting up the new BUTIQ-store I had to deal a lot with craftsmen and tried to ease things by emulating the dialect. Sadly I doubt anyone bought it.
Despite the fact that you are born and bred in Mannheim you studied in Heidelberg. What was your plan?
Rather than business administration in Mannheim I wanted to study political economics in Heidelberg, as it appealed more to my interests. I didn’t have a clear career goal, though I knew I didn’t want to be someone’s employee later on. Together with a fellow student and an acquaintance I founded the Werkshaus GmbH in 2001. We had the simple idea to sell insurance and financial brokers a CRM software solution. While things did work out business wise the whole ordeal was quite boring and the team didn’t get along well. Eventually we ended operations and painstakingly paid off the loan.
How did it feel to fail with your first start-up?
I don’t know many people that succeeded with their first endeavor. Failure is part of the game. You always learn from such experiences — which is essential. Just pick yourself up and carry on.
How did you continue with things?
I started Marktform GmbH and the Förderland platform with a good friend in 2003. Starting up was always a big thing for me. And from my own personal experience I knew how difficult it was to get the right information back then. So we developed a industry-specific platform for start-ups and businesses and put it online. With the work of our editorial department we quickly became the largest information and news portal on the subject. And in 2010 we were bought up by a major publishing company.
Where do you take the drive to start your businesses?
I ask myself the same thing, and I don’t really know, to be honest. My grandparents were workers, my father a physician and my mother a teacher. My brothers also don’t have any comparable ambitions. I just don’t share their safety-mindedness when it comes to my own career. On the other hand I don’t feel that starting up feels that scary. I find it much more scary to quit a secure job and switch over to being self-employed. It’s much harder to scale down ones standard of living later on.
You also like to find enjoyment in your work?
Yes. I always wanted to do something in life that fulfills me and is fun. If the market situation is exciting I don’t really care what we are selling, be it socks or pharmaceuticals.
And we’ll get to the socks in a moment. Before we do though, let’s talk about pharmaceuticals. In 2010 you founded Apomio, a price comparison site for medications. Tell us about that.
The whole idea of comparing prices online was still fresh back then and I had just finished a software for the pharmacy market together with some friends of mine. The business was tough, as pharmacy advocacy groups were massively fighting the concept. We had found a gap in the market and could make good money while keeping costs low. I honestly worked half a day a week on the project and it ran fine. In the end though problems arose amongst the team. One of us wanted more pay, the other wanted to invest more and yet another wanted to sell the business.
And what did you want?
In the end I was bought out of the business in a classic management buyout situation.
Your answer to an old question: should one rather have a beer or make business among friends?
I have to say, I would keep things separated. I don’t want to spend my time off talking business. Though this does not keep me from being on friendly terms with my current business partners.
Are you a team player or a lone fighter?
I can’t fend for myself all alone. I would go under. I need someone who complements my work and my role in a team. I’m the one who will push things ahead, and who will tear walls down to make room for new things. I need someone who will take care of securing and stabling the construct and to keep on developing it. I don’t have a talent for organization and so it is essential to have a partner such as Marc Langner in Good Brands AG, who takes care of the business administrative side of all of our investments.
How did you get into investing?
After Förderland and Apomio I had some funds in my bank account and started investing in other startups. I’m into tech, so I started funding teams that had good ideas in the „Software as a Service“ (SaaS) sector. My personal Matthias Storch Ventures GmbH was then replaced by Good Brands AG.
What are the advantages as a stock company?
It is a considerable effort to be listed on the stock exchange, but it is also a major advantage business wise, as it helps ease the inclusion of additional investors. My partner Marc Langner has all the know-how on the process. He studied business administration with a focus on controlling, management and information systems. He was also active as an investment manager and supervised portfolio companies.
How does one come up with the idea to invest in socks — or to put it in different words: What triggered the idea to establish the Von Jungfeld label?
It’s a real Mannheim story! After unsuccessfully launching several tech start-ups, I wanted to try something totally different and when I was introduced to Maria Pentschev and Lucas Pulkert during a pitch at the Mafinex technology center, I instantly wanted to work with the two. The whole socks idea came later and we all got into it together.
The jury of the TV show „Höhle der Löwen“ declined an investment with Von Jungfeld. By now though prominent investors such as Joko Winterscheidt are on board. How are things going?
We had to invest a good amount of money, but right now things are really starting to get fun. The brand has become well-known and aside from Joko Winterscheidt we’ve got Anton Jurina, founder of the fair-trade fashion label Armedangels on board, as well as Chrono24 manager Tim Stracke and industry expert Peter Sudholt. At the moment we have to decide what is strategically wise: either further develop the brand or sell it if the moment is right. Fortunately we now have all the possibilities and can calmly decide what to do.
What would you tell young founders with a good idea, that want to secure investments?
I’m no fan of government funding and never really utilized it. Merely applying for such funds can take an immense amount of time, and so we always rather used our time for work on our projects. Apart from that one needs a business plan for such applications and I never wrote one of those in my life! A pure waste of time.
What would you say is the optimal route?
We need more seed financing! Most elevator pitches have people sitting there that aren’t real investors and really just want to feel important. Mentors are often even worse as they won’t even invest anything, and still want a share in the business. There should be a lot more gutsy seed financing.
Such as your very own Good Brands AG?
Indeed! We work as follows: once we have decided on funding a sort-up we take care of initial financing and ensure that sales start flowing. In subsequent rounds we secure external investors. Though any young founder interested in working with us should know that we expect them to come to Mannheim. We have no interest in supporting any business in the early stages, that is difficult to reach.
In addition Mannheim is a good place to obtain follow-up investors, right?
Absolutely. I see this as the key advantage compared with other start-up cities such as Berlin! Many people aren’t aware that there is a lot of money around these parts, coming from large companies such as SAP, BASF, Roche, Südzucker, Bilfinger & Berger, ans so forth. And in addition to the above, there are further reasons to come to Mannheim: there are great universities here that offer excellent networks. We have eight start-up centers here, and the city and region are cool and offer a high quality of life.
You live and work in Mannheim. Could you imagine a life somewhere else?
Nope. I love my life here in Mannheim. My family is here and I know the city very well. On the weekend I love taking my bike to the city parks, or along the Rhine. In just a few minutes you can get to the Palatinate, and I really don’t miss a thing! The quality of life is great. Living expenses are comparatively low here, and we have great nightlife in Mannheim. But again: this story alone is not enough. My message to anyone starting up out there is: there is money here for startups!
Interview: Ralf Laubscher / LA.MAG Content. Corporate. Communication.
Photos: Daniel Lukac