Imagine, you built up businesses for years and suddenly you realise you are not good at what you are doing. What sounds a bit like a nightmare is actually what Oliver Holle (43) felt at some times in his past, he confirms. “I had been a founder for almost ten years, when I eventually began to realise that a lot of things had gone wrong, only because I refused to see them.“
We even tell our startups what we pay ourselves, so they know that we are sitting in the same boat. It might not be everyone’s cup of tea, but it works for us.”
It’s a surprising confession from someone who is part of the elite of the Austrian startup scene today. Since he came back from the US in 2008 Holle is not only well-known from from TV shows and media (inventures has already chosen him for an Investor Pick), but he is also a pioneer in the field of investment in Austria. With a business model that is different to most institutions in this field, he created a new investment platform called SpeedInvest in 2011 that has proven to be successful against all odds. “Personally, I just know that I am a better ‘trainer’ than ‘football player’. To switch sides was the right thing to do.“
In many ways SpeedInvest is set up as a startup: Holle and his six partners are holding direct shares of the venture fund that supports young businesses from Austria and CEE during their seed phase. Holding offices in Vienna and San Francisco, each partner is responsible for their own portfolio of startups to which they act as a mentor and co-worker till they reach Series A. “The most important thing during these early days is trust,“ Holle recalls. “That’s the main business factor of SpeedInvest. We even tell our startups what we pay ourselves, so they know that we are sitting in the same boat. It might not be everyone’s cup of tea, but it works for us. And so far, we did well.“ Having supported teams like Wikifolio, Shpock, Bitmovin or indoo.rs, just to name a few, SpeedInvest records successes on an international level these days. Now, that the first fund is in its final stage, the team of SpeedInvest is reaching out to even bigger things.
SpeedInvest II will lead Austria to the next level
Preparing SpeedInvest II at a BBQ setting; Photo credit: SpeedInvest
As Oliver Holle exclusively reveals in the interview with inventures, the team has now started the project SpeedInvest II that aims to take investment in Austria to an international level. Whilst SpeedInvest I raised 10M and recruited 34 investors mainly from Austria, its follow-up project aims for higher goals: this time Holle and his team aim to raise 50M euros and expand their teams in Vienna and US to 16 senior partners. They will not only accept a larger number of startups in CEE, but also want to be able to stay with them during Series A. “The potential in CEE is immense,“ Holle knows. “So the goal for SpeedInvest IIis to find the best startups in CEE and be able to support not only in their seed phase but also to continue to work with them if we want to.“
After reviewing the past three years, the team of SpeedInvest started to work on the concept beginning of 2014, to eventually finalise it in August in an “intense four-days-BBQ in my garden in which Michael Schuster made the best steaks in the world,“ Holle reveals.
However, during reviewing all seven partners came to the same conclusion: that they want to continue to operationally support startups during their seed phase but need to continue to invest into these startups until they successfully launched on an international stage. Up to now, SpeedInvest had to go out and find additional Business Angels after first investments “which, of course, brought financial support and personal enrichment. But it was very time intensive and often wouldn’t add any additional know-how or networking as by then everything was already set up,“ Holle explains. With the bigger investment pot, the seed-fund will not only be able to continue to invest in their startups through the next phase but also choose more carefully on additional partners. So, SpeedInvest II joins forces with the European startup platform Pioneers and the Business Angel Hansi Hansmann in order to support young businesses not only with capital but also with know-how and an international network of experts.
Breaking Austrian investment grounds
Oliver with Business Angel Hansi Hansmann and Andreas Tschas of Pioneers; Photo credit: SpeedInvestTo raise their target of 50 million euros, Holle andhis team are addressing private investors in Austria and target larger investment institutions all over Europe. “A private investor won’t be able to invest four or five million at once. But corporations from many sectors – financials, media, telcos or retail – can and they all need access to startups.“
Before Holle and his team, no one has ever tried to set up a fund of this in this magnitude in Austria. Although this endeavour also means a risk, Holle remains optimistic: “There are funds of this size in Munich and Berlin so why not in Vienna? I feel it’s the logical step to do.“ And on a more personal note he states: “I am very confident we can reach our goals. On the one hand, because we have gained a certain reputation in the last years, which helps. On the other hand, because I feel that we are good in what we are doing.”
About American Idol, failure and becoming an investor
It was disaster. I was a disaster. In the first three years I didn’t listen to anyone.”Oliver Holle about becoming a founder
The success of SpeedInvest the past three years proves him right – although Holle’s history as an entrepreneur tells a story of success as well. After studying economics in Vienna and New York (and winning several titles in water skiing on both continents), Oliver Holle founded his first startup SYSIS in 1992 whilst still studying. The team of threewas taking smart and interactive games to an emerging online market and was one of the first startups in Austria to receive a multi-million euros amount in funding for their concept straight away. After the dot.com bust destroyed many of SYSIS’ early clients, the team quickly started to focus on mobile content, which resulted in a three-way merger that created a leading European mobile services player, called 3united. During this time one of the startup’s services made international headlines when the TV format American Idolchose it for their very first ‘mobile phone voting’ service.
Behind the scenes, SYSIS in its early days showed another side though. Oliver Holle, not holding back with words, describes this time as following: “It was disaster. I was a disaster. In the first three years I didn’t listen to anyone – neither to my investors nor to our customers. I just wanted to convince everyone that my ideas are the best.“ So, instead of working on product market fit, quite some amount of time and funding was spent on building a large, stylish office and even the investors at the time didn’t stop them. “Some of them had no connection to the practical work of a startup after being in the banking industries for years,“ Holle analyses the past situation and describes their relationship as good but non-productive. “We liked each other but we were like two blinds holding hands and going in circles.“
Failing is still a taboo somehow althoughit happens to the most of us.”
Eventually things caught up with SYSIS and Holle had to acknowledge that he had failed. “Failing is still a taboo somehow although it happens to the most of us. When things started to go wrong, I knew that I did the harm. It was a tough time, and it also was the time I stopped believing that my own ideas are necessarily the best in the world.“ After two years of hard work, big personal risks and constant fear of complete failure, SYSIS came through with a global contract with Ericsson for its mobile content solution. The company then merged with two other local startups and became one of Europe’s leading mobile service players, called 3united. 3united, highly profitable and fast growing, eventually was acquired by VeriSign Inc in 2006.
Holle, feeling relieved, went on to work in Silicon Valley before he eventually returned to Vienna in 2008 where he now lives with his wife and four kids. “When I decided to work in San Francisco I knew already that my core strengths where building teams, structures and culture, not necessarily in innovative product ideas. I had time to ask myself what my real strengths are and started to think in new directions.“
Investors and the luxury of grand parents: You cannot live the lives for your founders
Oliver speaks up when it comes to the reputation of the Austrian startup scene; Photo credit: SpeedInvestFailure and his experiences as an entrepreneur helped Oliver Holle not only to move forward and become an investor but also to define his job. In his job he puts his focus on two major topics: Firstly, and as mentioned above, a personal relationship with the founder teams. “This really proves as a big part of our success although we get emotionally attached which can be difficult at times,“ Holle says. “It’s a bit like being a granddad: you feel and suffer with them, but in the end it’s not your call and not your responsibility.“
And secondly, a healthy self-perception is needed. “This mainly applies to us as investment managers. I know I can help a founder team to raise one million dollars but I wouldn’t get involved in product development as this is not one of my strong skills. And we need to remember, that startups do not necessarily need to work the same way we do.“ For founders who remind him of himself back in the days, he doesn’t mince words though: “If you don’t listen at all you can’t be an entrepreneur. At least you have to listen and then you still can say no. But not listening at all… that doesn’t work.“
And he is also not holding back when it comes to the reputation of the Austrian startup scene and sees it his responsibility to speak up. Although it’s developing well and is on a very promising way, he emphasises that “it’s still too much in love with itself. It’s all about talent and ideas, and institutional partnersare often perceived as enemies. They are important supporters and they do some things better than others, things we all can learn from.“
Even SpeedInvest is not an exception in this case, Holle knows. “Thanks to our business model, we are a quite homogenous bunch of guys and constantly need to work on keeping an open mind. And we still can improve a lot in terms of timing and delivering.“
However, SpeedInvest’s next goals are set and confirmed: by the end of 2014, half of the 50 million euros shall be raised (the other half is set to be achieved by the end of 2015); by the beginning of 2015 the new (and international) additions to the team of SpeedInvest will be announced. And then it’s time to go out in the field again, to look out for CEE startups that are ready to aim for bigger things.