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“No one gives feedback to the CEO”
christinaf Posted On April 28, 2015


We just finished a special content focus on failure by telling unique stories of CEE entrepreneurs that were facing difficult times with their ventures. What’s your biggest  fear?

To fail as manager and simply working too much. As a CEO no one gives you feedback and if so it’s hard to tell if the feedback is honest. That’s a real problem in my opinion. I am even thinking about writing a book about it one day. And, as we are a fast growing company, the working hours seem to become more and more, so the logical next steps are to delegate tasks to other team members. I am fine with that on a professional level, but it’s a challenge on a personal level. 

What are you doing to support these challenges? 

For the feedback, I actively ask my team to give me feedback, which might not be easy for them at times, because I always have an explanation why I did it my way (laughs). I also have a mentor I talk to on a regular basis and I have an agreement with my assistant, Eva, to tell me straight away. She is doing a brilliant job!

For the working hours, Eva helps as well. We already managed to cut my working week down from 80 hours to about 60 hours, but I still need to reduce the hours a bit more. After all, we didn’t found the company and commit to not having a life anymore. On a personal level, these are the two things I really want work on this year.

[reference id=”2194″]

What was the biggest challenge for Runtastic?

That was on a personal level as well… When one of our co-founders became seriously ill and his future was uncertain. Thankfully, after only a few months, we received the good news ofhis full recovery and things got back to normal. But times like these remind you very quickly what really counts…

Were there any setbacks on a business level?

I don’t think we ever had to face major difficulties – or maybe we just didn’t see them as that. There was one more difficult time when we went from 60 to 90 employees in a very short time without having the structure to provide them with the jobs we hired them for. But, we also learned from that. We are still working on ten projects at the same time, and that’s one of the reason why we are successful, I think. But, now we are taking the time to develop better structures and processes, as well.

Runtastic’s heart rate: the time line of a success story; Photo credit: TOSA

Many are impressed with the growth of Runtastic as a company. What are your strengths?

I am practical-thinking, but all of our cofounders are – I  think that’s why we work solution-oriented, and are not really afraid of failing. I am a fast decision-maker which is ‘must’ for a CEO, in my opinion. And I love talking to people, which is indispensable if you want to sell a mass product on a B2C basis. For that, you need to understand your target group and you that means talking to a lot of different people, which I genuinely enjoy.

Do you make mistakes?

Yes. Probably every day. I make so many decisions in one day that it’s only logical that not all of them are the best. But, this doesn’t really concern or worry me, as long as I continue learning.

[definition title=”When Apple Watch meets Runtastic…” text=”Only a few days ago, Runtastic announced that three of their Apps will be available for the brand new Apple Watch which is about to deliver its first batch to customers. Runtastic users can use their Flagship Runtastic App, the Runtastic Six Pack App immediately – the Runtastic Butt Trainer is about to follow shortly. Further, the Runtastic Running & Fitness App will be featured on the Apple Watch Companion App (pre-installed on the iPhone iOS 8.3). Florian Gschwandter: ‘We are always looking for high quality products that provide innovative platforms to use our apps the best way possible. With Apple Watch we have the best.’ More info can be found on the link on the right.”]

Besides, your apps being available for the Apple Watch, you’ve just made public that Runtastic will turn into a Big Data company…

Not ‘Big Data’ as we know it; it’s our very own ‘Big Data’ which we want to use with more efficiency. With 140.000 downloads daily, we have a lot of data available. We would never sell to third parties, but we want to add its value for our users. So, for example if someone wants to lose five kilos, we can provide targeted exercise plans from other users with similar demographics (who achieved success). The products and services we are currently working on, will work as health and fitness services and motivators at the same time.

But, before that, we have another app launch planned for the end of the year. Simultaneously, we want improve our Runtastic Ecosystem and turn it into a dashboard for users that hosts all their fitness activities. But, this will be a process and likely only ‘complete’ in the next two to three years.

Is there anything you wish for outside Runtastic?

Yes – for a better education system in Austria. Kids should learn English from an earlier stage. It still takes too long until we reach a level of English that allows us to broaden our horizons. And, like in the U.S., international business should be a higher priority subject in the education system. I will try to support this in the years to come and topics such as these might become my biggest mission for my time after Runtastic.


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The Professional Risk Taker
michaelb Posted On April 24, 2015


inventures: You worked at Roland Berger for 20 years and left at a high point – of both the market and your career (aged 54) – to become an independent investor and advisor. Did you fear failing in this transition?

Manfred Reichl: For me it was quite logical. At Roland Berger, I was very successful, but once you’ve spent 20 years as a horse in front of a carriage you want to do something different. I knew my next phase must be started early enough, so it was a simple decision for me. I’ve seen so many top managers approaching retirement age whose colleagues were already thinking, “when will he finally get out?” I promised myself that I would leave the job before this happens. All those who stay put in their comfortable chairs, they aren’t entrepreneurs.

[definition title=”Funding a startup is like an airplane take-off…” text=”The idea is ready to embark, the business waits at the gate. First, the plane has to be pushed out, and then taxis to the runway (friends and family). Then it has to accelerate rapidly (Business angels, public funding). Most of the fuel is needed to reach take-off speed and to get airborne (other private investors). Once it has proven flight capabilities, only then venture capital companies come in. (Quote from Manfred Reichl in the VENTURES ALMANACH AUSTRIA 2015)”]

In our Ventures Almanach Austria 2015 you use a metaphor of an airplane taking off to describe a startups’ path to success. At what point is the plane most likely to crash?

Shortly after it has taken off.

Among your own investments, were the “crashes” due to pilot error or mechanical malfunctions?

Of my investment in internet companies, I’ve had one that was extremely successful and multiplied my investment in this area, but there were three failures that are a kind of lesson for me. In the company where I lost the most money, I completely misjudged the management. It was a founder in his forties and I only figured out too late that he didn’t have the spirit required for an internet company. For example, he was not able to move and negotiate fluently in the Anglo-Saxon countries, which is a prerequisite to being successful with an internet startup.

One of the lessons I learned here is, don’t trust too young people who do not really have to be successful to maintain their standard of living.

Another one was a fashion startup from Vienna – a company I still regard as having had a great business model. The “pilots” believed that they needed to “fly” to London, the centre of the European fashion industry. They actually raised a million euros from a venture capital fund, which also brought a lot of big industry names to their advisory board. These fashion people convinced them that they should change their brand toan upscale luxury label, which was completely stupid for their business model. In the end they had spent half the money just relocating and settling in London, where they were just a drop in the sea and got lost in the seductions of the big city and industry celebrities. It became a kind of three-year postgraduate education for the founders, financed by their investors. Actually, they were very good entrepreneurs and probably would have been successful if they had stayed in Vienna, but they were just too young. One of the lessons I learned here is, don’t trust too young people who do not really have to be successful to maintain their standard of living.

The third was a company where I invested only 20 or 30 thousand euros. They were not bold enough, too narrow-minded. They kept coming back to the investors for rounds that proved to be too small. An entrepreneur must ask for more money than he thinks he needs. Back to your question – I think that it is mostly the “pilots” who caused the failures.

What could you have done differently?

In the last case, I could have said no, but it wasn’t a lot of money involved so I didn’t put a lot of emphasis on whether it was the right business model. The first company was too slow and not ambitious enough and the founder didn’t fit with the social environment for which he was developing. If I had conducted the interview with him in English, I would have seen the problem right away.
And in the second case, there was nothing I could have done. The founders were too young and independent and they made a principle failure which I too often observe: they trusted in venture capital.

You see VC as a problem?

Very much. I’m very sceptical about most VC funds which are founded by former bankers and not experienced entrepreneurs. To highlight a good VC-fund: I find the approach of SpeedInvest, the fund in Vienna, very appropriate, because the founders and managers have been entrepreneurs in the areas where they invest.

I’m very sceptical about most VC funds which are founded by former bankers and not experienced entrepreneurs.

VC funds quantify what is an acceptable failure rate and then create strategies for managing the risk through diversification and hedging. Do you, as a business angel, also do this?

Of course, you hedge by multiplying and diversifying your investments among various industries. I have had more than ten investments, three of which are very successful. I did two pharmaceuticals, three engineering, and five or six internet.

Is there a specific failure rate that you consider acceptable?

When I was elected Austrian Business Angel of the Year in 2009, I stood on thestage and said that I do not accept any single failure. Every investment is like a baby and you must do everything to prevent its failure, if you see a chance for success. This is different to VC funds, where failure is calculated with statistics from the outset. Business angels, at least the way I see them, should really care for each of their investments, not as a statistical point but rather as an entity to be supported even in difficult times.

How do investors themselves contribute to a startup’s failure?

By investing in something where they are not 100% sure and by not requiring appropriate corporate controlling, even for small startups. One of my failures was not insisting enough on this.

Would you give a second chance to entrepreneurs who’ve previously failed?

Yes, clearly! There’s one pharmaceutical company where I have invested a lot of money. Its CEO previously founded another VC-financed pharma venture in the 1990s that had failed. I invested in this new company because I knew doing it right requires experience from a previous failure.

Are you so willing to forgive someone who failed with your own money?

Yes, of course. One of the Pharma companies that I have invested in had difficulties during the trials and we saw that its failure was imminent. We are taking its CEO and giving him a chance in another company. Even though I lost money on this, I knew he is a very good person and it was not his fault.

Have your past failures changed the way you invest going forward?

I told myself and my wife that I will only invest again once I have successful exits. There is certain money in the game and I will not increase the stakes from my own private wealth. The existing money has to multiply itself. So there are no explicit consequences in terms of content, just in terms of limiting the overall sum.

People say that there is more of a stigma behind failure in Austria than, say, America – perhaps because Austria is much smaller and has restrictive bankruptcy laws?

The issue with the bankruptcy law is one of the operative outcomes of the basic Austrian character since the monarchy times. The real issue is that there’s been a lot of negative, collective experience in Austrian society, which made it risk averse, starting with the stock market crisis in 1873, via the two world wars, the crisis of the 1930’s, etc.
The USA social character, in contrast, still has the pioneer spirit of their ancestors, who conquered the continent in the 19th and 20th century. They have always looked for new things. In the US, there is a greater sense of individualism – anybody can make it or break it on his own. A dishwasher can become a billionaire, and there is much more aggregated capital in private entrepreneurial hands.

And in Europe?

In Europe, we have an anxious, relatively narrow-minded society, which wants the state to provide for the people from birth to death. Historically, the emperors, especially the Austrian emperor, cared for their people, the people were his Volk and this is reflected in the social and political values. And the Europeans destroyed most of their financial and social capital during World War II.
It changed a bit after World War II, when everything was to be rebuilt and people had nothing to loose. With the high demand during the post-war era, you could finance your company out of the cash flow. Austria still has dozens of highly successful world market leaders in their niches, so called hidden champions, which were founded in the fifties and sixties

We are trying to changethe social mentality so at least the next generation is more open-minded, internationally oriented, and less influenced by those restrictive, traditional values of our societies.

Today, times have changed – you can no longer finance startups from cash flow, you need outside investors; today’s startups require different business models; cash-flow financing would take far too long and there is tougher competition globally. Fortunately, today’s youngsters below 35 have a more entrepreneurial attitude and, together with business angels like Hansi Hansmann, Oliver Holle, myself, and some others, we are trying to change the social mentality so at least the next generation is more open-minded, internationally oriented, and less influenced by those restrictive, traditional values of our societies.

Should the state develop or expand any policies to assist those who fail?

We have too much state influence, anyway. The only thing the state should do is to lift barriers. For example with these stupid regulations in the corporate laws, which punish even good people who have failed once. The state should leave the entrepreneurs alone, smooth their way, and incentivize wealthy private persons and foundations to invest in young, promising companies, e.g. via tax incentives. This would stimulate innovation much more than many subsidies. I have to say that AWS and FFG and other supporting entities are doing a good job in helping young companies. However, it is often the case that innovative start-ups get money to accelerate, but the money flow stops when they are taking off, because private money is lacking. We have written a paper in the Austrian Angel Association with a number of measures that could be enacted.


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The reinvention guru
manonp Posted On April 23, 2015


Nadya’s peculiar life path took its first unlikely turn in Kazakhstan when she put an end to her six-year career as a professional dancer in the national troupe, physically unable to carry on.

“I was so ashamed of my failure that I didn’t even have the courage to tell the director about my decision. I simply stopped coming and never said goodbye or thanked him for his teaching,” she says.

This was a failure, without which she would have never discovered her real interest. Afraid that she would go on a dark path paved with drugs and other teenage hazards, Nadya’s parents sent her to work at an assurance company, where she fell in love with business. She moved to the US in 1998 to pursue a postgraduate programme. Positive failure struck again with her doctorate later on when she got rejected by all the business schools she applied to but Case Western Reserve University, which she had only reluctantly considered.

“Looking back, it is fortunate that I failed getting admitted in any other school, because I realised that Case Western Reserve was the only one that truly matches my understanding of leadership management and knowing what school of thought the other ones represented, I would have quit anyway,” she explains.

Once a doctor in organisational behaviour, Nadya started JZ Consulting in 2007 together with her husband, whom she had met at university. The firm became profitable by the end of the year and has been lucrative ever since. In 2008, Nadya moved to Slovenia with her family, taking on an offer to run the MBA programme for IEDC-Bled School of Management. “It was a wonderful invitation to shape the region, as this school is educating not only the vast majority of Slovenia’s executives but also of Kosovo, Croatia, Serbia and even of Ukraine and Georgia. Working at this important executive platform was a very exciting opportunity,” Nadya says.

Embracing change

You don’t have the choice but to renew who you are because the world is changing.

“It felt very much like you had to start from scratch and prove yourself because nobody cares about your past in this new environment. You don’t have a name for yourself; you don’t have a reputation, or people’s trust,” she remembers starting over in Slovenia.

Despite experiencing a few “what-in-the-world-were-we-thinking moments”, Nadya considers moving on as a necessary and benefiting decision. “You don’t have the choice but to renew who you are because the world is changing, so either you’re going to change, or life will swallow you. It’s scary yet liberating at the same time.”

Nadya applies the same mindset to business, recalling having made investments that tanked and decisions to partner with people that led to disasters. “Failure leaves you with no option; that what’s reinvention is about; letting go of everything but your very best, and finding a new way of using it. If that’s reinvention, then failure is your best friend to find a better version of you,” she says.

Photo credit: Nadya Zhexembayeva

Letting go of things, however, is the real issue in entrepreneurship. Researching the subject of sustainability for 10 years and writing two books about it, Nadya says that most people associate this notion with words such as ‘enduring’, ‘holding on’ and ‘resisting’ instead of reinventing and adapting, which she holds responsible of business failure. “That obsession with holding on is absurd; in reality nothing does. Instead of resisting change, floating on it is the best way of surviving,” she reckons.

This phenomenon, she says, is particularly salient in the startup world, where only 3 out of 10 businesses survive the 5-year mark. “They are failing because they desperately try to stay in business […] instead of getting out of it or reshaping it. That’s why I like the lean startup model better; you embrace change in the process and don’t hold on to your old cherished product.”

“Built to reinvent” rather than “Built to last”

The notion of reinvention has become the key concept of Nadya’s teachings. The overall life expectancy of companies has been significantly shrinking and that the phenomenon has been speeding up in the last decade. From 75 years in the late 20th century, the lifetime of a company decreased to 15 years at the beginning of the 2000s and has now come down to seven years on average, she says based on her latest research.  

Nadya is adamant that it is essential for companies to reinvent their business model while their revenues are going up: “You have to reinvent yourself just before you reach prime-time, before you get too comfortable, otherwise it’s easy to think that you are too good to fail, too big to fail or too scared to move. You’d better choose your own failure rather than being a victim of it.”

This means that companies must start the reinvention cycle anew after about 3,5 years into their existing business reality in order to stay afloat. This “adapt or die” mindset she develops further in The Ten Commandments of Today’s Sustainable Company, her freshly published manifesto.

Shaping the future of executive leadership

They are failing because they desperately try to stay in business […] instead of getting out of it or reshaping it. That’s why I like the lean startup model better.

While running a private equity fund with the profits from her consulting business, Nadya has been practising being an in-sourced executive ten days a month for another firm since 2012, a concept she says having borrowed from Pharell Williams, part-time creative director of several companies.

“This model allows you to get ideas from different industries while being a in full-time commitment: You are responsible for results, but at the same time you have a fresh eye every month because you work with different products and industries,” she explains.

Nadya advocates for enriching the C-Suite with this new executive position, the Chief Reinvention Officer, a title that she coined for a role that she believes to be necessary to include in companies’ management board in the future. As for her plans, she considers  progressively moving her family and activities back to the US, ending the Slovenian chapter for the time being.


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The different faces of failure
Team Posted On April 22, 2015


I define failure as the fear I feel before something undesired happens. It causes anxiety. If indeed it happens, the awful feeling of failure is temporary and eventually transforms; life goes on. When we fail, resistance is futile; awareness is essential in order to learn and avoid self-victimization.

After all, the saying goes: “Failure is the road to success”. But, do you live your entrepreneurial life without fearing failure?

I have been exploring the meaning, effects and causes of Fear & Failure related to entrepreneurship since mid-2013. I have heard many interesting stories, and what I’ve come to understand is the following: Big failures are the explosive result of smaller and systemic failures. Let’s check some of them out:

Failure to understand the role of fear and anxiety

Think of both fear and anxiety an alarm system that  goes off when something needs attention. If I ignore my fears, I might be letting something important off the radar. According to author Seth Godin, anxiety is experiencing failure in advance; in other words is having the mind focused in the future, therefore ignoring the present. If I am exclusively trying to control the potential outcome of my actions, I get lost in planning and forget to execute my vision for today. Anxiety is another alarm system that reminds us to remember the present. Can you go to sleep with the satisfaction of the everyday achievements?

Failure to have a clear answer to “who are you?”

I usually try to answer this question with my professional accomplishments, but I always felt uncomfortable with it because what I did could always be dwarfed, compared or judged. Honestly, it wasn’t easy to define the version 2.0 of myself, but it helped to know that I am what I love doing, not only what I have done in the past It’s refreshing to know that changing what I love doing isallowed. Are you your profession?

Failure to agree on the meaning of important words

[definition title=”About the event series” text=”Fear and Fail is an event series, founded in 2013 by Jose Morales. The events aim to raise awareness of the different forms of fear and failure and supports exchange and networking on the subject. Events take place throughout Europe and feature 3-5 different speakers on each event. More information on fearandfail.com”]

I usually talk about entrepreneurship and recently, as a founder of a coworking space, I found out that the confusion about entrepreneurship is so huge that it can damage my business. I practice to identify the important words at meetings or conversations and then ask if everyone understand these words in the same way. If you try that, get ready for surprises and engagement. Is your team in sync with the basic concepts your business uses to communicate?

Failure to ask

Many times I say things instead of asking questions, probably because of fear of showing vulnerability. Not long ago, I learned that asking good questions shows more self confidence than saying things as if “I know” they are right. Self confidence sells. Do you prefer to be silent when you didn’t fully understand an idea?

Failure to change

Change is so threatening that I might convince myself that the low current level of income is better than the possibility of a rejection by a big potential customer. Change is inevitable – either I drive it or it drives me, both of which are valid options. Are you consciously choosing to drive change or let it drive you?

Failure to celebrate

A good friend of mine awarded himself with a simple chocolate each time he passed an exam. As I see it, celebration is cumulative and tends to enforce a sense of achievement, commitment and integration. I consider celebration as part of the process of creating organizational culture. Are you celebrating only when reaching big achievements?

Failure to say no

I often say yes even when saying no is what I feel like doing. I tend to think of that sacrifice as an investment, but today I’m confident to say that the tactic doesn’t work for positive ROI. It’s good to be nice, but it’s better to not be stupid. Are you afraid of rejection, not belonging or not being nice enough to fit in?

Failure to understand the role of others

I grew up listening to the understanding that we are all the same. Today, I know that what I heard meant: “we all share the same rights”. Some of my biggest business failures are related to treating team members as if they think and perceive things the way I do, therefore ignoring much of their individual potential and challenges. I learned that the role of others is to complement, inspire and support each other. Do you get upset when someone doesn’t react as you would?

Failure to understand the role of money

As I see it, regardless of a company’s, business model or organizational structure, failing to define the role of money for a business is a big mistake. Thus, avoiding extremes on the definition of that role is important. I see money as the oil for my car engine, where the engine is the business and execution is the gasoline. Do you feel like your business can’t grow anymore?

Failure to understand you are not the business

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I always thought of my businesses, especially the successful ones, as an extension of myself. I would use those cases as a reference to my personal worth. Big mistake, Jose! If something went wrong, I myself felt as a failure. Today I design my business, thinking about it as a separate entity that does not work to satisfy my ego, but to produce the results I wish to achieve. I feel free and my team feels empowered. Think of your business as a machine you are helping to create. Do you feel personally affected when your business goes wrong?

This is the first time I’ve come up with a list of failures. I’ll print them out and use them to remember along the way that small failures are the ones that carry the potential to generate big ones.

Win two one-on-one sessions with Jose Morales on fear, failure and entrepreneurship by sending an email with the subject “Fear and Fail” to office@inventures.eu till 30 April 2015. All applicants will be forwarded to Jose Morales, details will be treated with confidentiality. The winner will be chosen by lucky draw.


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