Friedrich A. Neuman: “If you’re doing an MBA because you want to start a company, I’d say: Screw the MBA. If your idea is to be an entrepreneur, then found a startup. Spare the money for the MBA and invest it to start your company.”
From Failing Twice to Building Company after Company
As founder & CEO of the company builder MAKERS, Friedrich A. Neuman truly knows how to start and scale companies and take ideas ‘from zero to one’. Originally from Brazil, he came to Europe at the beginning of his twenties to study Business & Economics in Switzerland. Afterwards, he moved on to Berlin where quickly started to make a name for himself as a serial entrepreneur. Among others, he joined Rocket Internet and co-founded the social gifting platform Dropgifts in early 2012. In the same year, he went on to found e-commerce marketing platform Run a Shop that generates a gross merchandise value of $1bn by now. In 2013, he eventually decided to focus his entrepreneurial spirit within MAKERS, helping other aspiring entrepreneurs to found startups ever since.
MAKERS is a Berlin-based investor and company builder that builds and invests in tech startups, offering an ecosystem where founders can focus on shipping early product versions quickly. It creates new startups from scratch, including recruiting suitable co-founders, and provides (pre-)seed investing in existing businesses that can also benefit from MAKERS’ in-house operational support. Besides (pre-)seed capital, the company builder gives founders access to office space, assistance with startup incorporation & accounting, software development, marketing & communications, recruiting & HR and product design.
Most recently, MAKERS’ lean business model successfully proved to be working when two of its incubated startups – IconPeak (founded in 2013) and BidderPlace (founded in 2015) – were acquired by performance marketing platform OLAmobile for a total of $10m. The deal represents an exit with 50x multiple (!) for MAKERS and helps OLAmobile ramp up its activities for mobile performance marketing.
Friedrich A. Neuman on Startup Notes
In this episode, Friedrich talks in more detail about how MAKERS works and identifies companies it would like to support, highlights exciting industries, the qualities of great founders and also explains why you do not need an MBA to succeed as an entrepreneur.
He made a bit of a deep dive into the specific challenges of a company builder – a business model that is often criticized within the startup scene because of relatively low success rates despite creating a lot of buzz (see Rocket Internet). Friedrich admits that making profit ultimately is the goal of a company builder as with any other company. This usually only comes with successfully selling a portfolio company though (e.g. through an exit or IPO). To increase your chances of selling a portfolio company, it does make sense to work on several startups in parallel. The challenge: To do that you need a bigger team, which among others increases your costs. Accordingly, it is not always easy to find the right balance between quantity and quality. Since it is only him and his business partner who share the financial responsibility to invest, they have the freedom to decide how many business they want to incubate after all. This is different than with a VC who has certain goals and metrics. As Friedrich puts it: “Building startups is more like art. It’s not something you can scale so easily. We do more of a boutique approach and prefer to do less deals. But good deals.”
This is the full list of topics that we cover with startup expert Friedrich A. Neuman of MAKERS:
[01:06 – 05:01] Friedrich’s personal background and development of his career
[05:02 – 06:58] How MAKERS works as a company builder
[06:59 – 08:33] On the process of developing business ideas
[08:34 – 11:56] The most exciting industries at the moment
[11:57 – 15:03] MAKERS’ criteria to invest into startups
[15:04 – 19:58] On the qualities of great entrepreneurs
[19:59 – 21:17] The ideal setup of a founders team
[21:18 – 23:17] What Friedrich’s daily involvement in MAKERS’ portfolio companies looks like
[23:18 – 26:49] On the challenges of a company builder
[26:50 – 31:03] The best advice that he ever received and why you shouldn’t do a MBA if you want to become an entrepreneur
[31:04 – 32:58] Open job positions at MAKERS
Podcast Host: Thomas
If you are interested in hearing more from successful company builders, VCs and serial entrepreneurs, make sure to also listen to our episodes with Philipp Hartmann (Rheingau Founders), Olaf Jacobi (Capnamic Ventures) and Tim Koschella (HitFox Group & AppLift).
Subscribe and listen to our Startup Notes episodes also on iTunes. If you do, make sure to drop us some feedback and a rating! Thank you for listening and being part of the Startup Notes community.