The 2015 edition of the pan-European startup contest Idea Challenge sees an increase in variety and internationality. The series of events re…
AplusB Founded in 2002, the AplusB network connects academia, business and economics in order to boost Austria’s entrepreneurial culture. Overall, eight founder centres pull together to develop innovative programmes and systems to support projects and startups in various industries such as IT, biotech, clean tech industrial projects or surface materials.
On our round table, six CEOs of the AplusB founder centres INiTS Vienna (Irene Fialka), BCCS Business Creation Center Salzburg (Gabriele Steinkogler-Scherzer), Accent Lower Austria (Michael Moll), CAST Center for Academic Spin-offs Tyrol (Florian Becke), build! Carinthia (Karin Ibovnik) and Science Park Graz (Emmerich Wutschek) came together to review their past performance, discuss current issues and give an outlook on the upcoming entrepreneurial challenges for Austria.
Analysing, comparing, discussing
Fialka: I started in 2004 and at that time, not even students at the WU (Vienna University of Business and Economics) were interested in becoming entrepreneurs. We were far behind other countries in the global statistics and the AplusB centre really made strides when it comes to dusting off the universities and forging entrepreneurial spirit.
Becke: I think that it’s just the fact that it’s not all theoretical, but put into practice. The people that had ideas and made them reality got help from us along the way. We were able to support and develop the best practice examples and role models, which sends a strong signal in each university department we work with.
Wutschek: What sets our startups apart from other startups is that they have an academic background. The people who have these ideas spent a few years to study what they plan to bring into the market, usually it’s a new solution, so there aren’t as many price wars when they enter the market because usually they are the first to produce their product.
Steinkogler-Scherzer: The person doesn’t have to be a scientist or accomplished academic. It can be a student who has an idea and hears one of our lectures. The idea develops and by the time they’re finished their degree they’ve sculpted the idea long enough to be ready to submit it to us.
Ibovnik: Compared to other co-working spaces we have resources such as infrastructure, funding, support in finding other funding that are designated for startups. We have no agenda and stay neutral throughout the process.
Fialka: That differentiates us drastically from private institutions, like Cisco, Bertelsmann, or Kapsch. They are always interested in buying into startups.
Moll: We’ve come a long way in these 12 years, but there is still plenty to be done to get the universities to a point at which they can work on the same level as examples in Israel or the United States, where entrepreneurial spirit is much more apparent. We still have some pretty fossilized departments at our universities and there are many steps that still need to be taken to give it the dynamics it needs.
Steinkogler-Scherzer: We also were a startup 12 years ago, just like the ones we work with today. And today we’re an established company, an SME, with branches in different states. Nowadays, we have a huge, well-organised network of mentors, business angels, and an expansive coaching program.
Becke: A big difference from six years ago is that today we’re more successful in getting private capital into the companies at an earlier stage. It simply took years to develop the network. Moreover, for the culture in Austria it was hard to accept the fact that there are people who are not afraid of the risk but are willing to invest in something at the beginning – even with small sums. That has changed immensely over the last five or six years. The fact that we have successful examples to show that this kind of investment works is to a certain extent because of AplusB.
If we look back [...] each of the centers had different stakeholders and different business backgrounds. We’re working together now.Florian Becke, CAST
Wutschek: It’s part of the current trend. Interest rates are so low that there are no alternatives for investors with a substantial amount of money. Also, the market for many products is over-saturated and entrepreneurs only have a chance if they can offer something new.
Moll: I’ve been involved for four years and I think the centers work together more than they used to. We used to compete with each other and now there is an atmosphere of trust that definitely was not the case a few years ago.
Becke: There was a certain establishment phase for the centres. If we look back, even though we all gave the same type of funding and support, each of the centers had different stakeholders and different business backgrounds. We’re working together now, with a much higher level of trust and I think that will also strengthen the AplusB brand.
Fialka: When we started there were almost no role models. It’s important to have people to look up to. Austria does that very well when it comes to skiing, but entrepreneurs and business angels have not reached that status yet.
Karin Ibovnik (build!) and Emmerich Wutschek (Science Park Graz)Fialka: AplusB is an infrastructure programme, so they measure economic growth, job creation and job quality of the positions at our startups. Our stakeholders don’t like to measure us by the amount of successful exits, but internationally that’s a main criterion in the startup scene. Our stakeholders don’t want the jobs to leave Austria. They want Austrian companies to create and keep jobs in Austria.
Becke: On the other hand the money paid stays here and could be spent here.
Fialka: But that’s much harder to measure.
Becke: But both are important. In order to have a vibrant, dynamic entrepreneurial culture you need the exits so there’s money to reinvest.
Fialka: Exactly, even when there is an exit, you may lose a few jobs, but you win potential in the sense that we’ve made new angels, because they will probably reinvest their money in Austria, if they have strong ties to home. That’s what we’ve seen with SpeedInvest and i5invest and Hermann Hauser. So that establishes the area as having great startups and as a place where you can shop for startups.
Fialka: In a sense we’re just the same as other incubators. But we also have conflicts of interest among our stakeholders. For example, the bmvit (Austrian Ministry of Transport, Information and Technology) thinks very nationally and doesn’t mind where in Austria a startup is founded, but the other funding entities want to promote activities in their region. On the other hand, the universities want their scientists and alumni to get support no matter where they come from or where they found the company. So even within our own ranks we have conflicts of interest that we have to deal with.
Wutschek: There are various approaches to making everyone happy. Some people get stuck on their egotistical goals. I’m on a few councils and we’ve had a few revealing moments. You tell them, “we’re on the same team, we want the same things. We want the best for the startups, or is that not what you want?” And then you’ll hear “How dare you?” (Laughter). And that’s how you get them. They have to be motivated in a positive way, no matter who the stakeholder is.
Moll: Planning security. We want to rely on this programme being around for a certain period of time. We could also definitely use less bureaucracy.
Fialka: Oh yes.
Moll: As a manager I miss working directly with the founders. There are certainly things we can do to better the way the system works.
Ibovnik: For our startups I’d ask the government to improve the conditions for investors and founders. Tax breaks and benefits would be very helpful and that would definitely come back to benefit the government.
Fialka: We’d be the last ones. The Germans just made a change and the British have done it for ages, they promote investment in startups by tying it to tax benefits.
Wutschek: We definitely have to stay alert and make sure we adapt to changes and take the appropriate measures, but not necessarily change the structure.
Becke: There is something like “market failure” for certain technologies. There is still almost no private money for high-risk or extremely innovative ideas that have a long development process. It’s very hard to get money for those at the beginning.
Dr. Florian Becke (CAST)
Fialka: A main focus is still accessing private money for our startups, which is one reason for our Business Angel day. International networking as well as the cooperation between startups and industrial companies will become more important. Startups are getting a better image now; they have a real scene and have a better reputation.
Moll: Also, in the future I think that the other players, the coworking spaces, the business angel initiatives, private investors, need to see us much more as partners, not as competition. So the question now is: How do we position ourselves to achieve that goal?
Becke: What would help us is a stronger interest in innovation and exciting new projects and if the media would cover these topics in a concise, enthusiastic, thought-provoking manner, but that’s not really the Central European way. There are other cultures that do it better and are more interested in this kind of thing. But it would really help the startup scene if we recognised new innovative opportunities. We haven’t reached that point yet.
Every region in Europe is trying to push the startup scene. There’s a paradigm shift.Karin Ibovnik, build!
Wutschek: Switzerland is known as one of the most conservative countries in the German-speaking world and still it has an extremely successful entrepreneurial culture. They have great innovative solutions and I’d like to know what it is that they do better. All the big pharmaceutical companies come from Switzerland.
Becke: But also Biotech. Their policies and tax exemptions all play a part.
Fialka: We won’t be able to gauge the effect of the things we are doing today for years. Today, we look back on the last ten years and see what has happened since we began motivating students. Now we can measure that the scene has grown and more is happening.
Wutschek, Fialka , Moll: Yes
Fialka: If you look at the way the startup scene is often portrayed, there is certainly an ICT (Information and Communication Technology) bias. That’s because those are the most active ones on media. A life science founder won’t necessarily use media, first of all because they don’t need it to build their client pool and secondly, because they are explicitly barred from doing so in order to protect the concept or patent. The other bias is B2C (business-to-consumer) and at AplusB we have a lot of B2B (business-to-business) models. The focus is on less “hip” categories.
Ibovnik: Every region in Europe is trying to push the startup scene. There’s a paradigm shift. If you take the example of Uber, which could turn the entire taxi industry upside down or the “shared economy” concepts that bring all kinds of change with them, were looking at something that involves all of us.
Ibovnik:Our big advantage is our interconnection with the universities. We have to keep that position of trust and we'll keep finding new ways to promote the idea of independence. It is important not only promoting research and development, which Austria is very good at, but bringing new products into the marketplace. The idea of spin-offs is now a main topic on universities’ agenda, but there is still a lot of potential there.
Moll: I also think we’re much more resistant to crisis than in typical IT incubators. We have biotech, clean tech industrial projects, surface materials… a very broad spectrum of technologies. So even if the IT bubble bursts, we’d still have plenty of areas that would keep us going.
Fialka: The universities will always do top-notch research. Our wells won’t run dry. If we can manage to keep the entrepreneurial spirit at the universities then the flow of new applicants will become stringer, not weaker.
It’s not just a job it’s a way of life.Emmerich Wutschek, Science Park Graz
Becke: I have the greatest respect for people who found a startup. Whether they’re alone or in a team, I admire people who want to make their own ideas a reality. They need to have that certain edge, or entrepreneurial spirit to make a project sustainable and usually they work much harder and longer than most other employees. It requires a certain kind of personality to want to do that. The combination of a good team and the right idea, that’s what makes it work. I have so much respect for people that take on the challenge and successfully pull it off.
Wutschek: It’s not just a job it’s a way of life. I was in a business myself for 17 years and I made a living repairing broken companies. The big difference is that now that I’ve been an employee for six years, I can say I’m very happy about getting a 13th and 14th monthly salary. And the fact that you can take a vacation...(Laughter)
Moll: It’s really the respect for the companies and that includes the ones we don’t supervise. These people believe in what they’re doing, they’re focused and they live for it. They have a drive that other people don’t. That’s what’s so fun.
Ibovnik: Also respect for those who try and fail. Taking the risk and trying something, I tip my hat to those as well.
This story is brought to you in partnership with AplusB, a programme funded by FFG.
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