ZAT

Markus Kainer calls himself a “classical marketing guy.” With thick black hair and darting blue eyes, sporting a white button-down, he is quick to laugh, has a friendly demeanor and, in keeping with his marketing persona, knows how to tell a story or two.

[reference id=”4588″]

His personal journey begins in Graz, where he went to university and got to know Stephan Laske doing sports. Fifteen years later, he would found a small company in Leoben, Styria, together with his friend. It would be a small startup with a big mission: to develop polymer-based biodegradable packaging products to contribute to solving the problem of waste disposal.

But more on that later.

Having worked as the head of marketing in a major Austrian furniture retail company, the 39-year-old Styrian, who is married with two children, says he basically had “nothing to do with technology or engineering.” But there had always been this question: Should he do his own thing?

Thinking of self-employment

For a while, it was just a thought, a distant possibility that would only come to fruition when in 2011 his friend Stephan from Graz, who had become professor forplastics technology at the University of Leoben, approached him about a preliminary marketing concept for a plastic foil that he had recently filed a patent for. “The more I immersed myself in the topic of renewable raw materials, the more interested I got,” Markus remembers. “It just happened somehow.”

Photo credit: IM POLYMER

The two soon entered their roughly drafted business plan in a competition, which they won. For the next year, the two toyed with the idea of starting their own business before taking the big leap in 2012 when they decided to found IM POLYMER as part of ZAT (Centre for Applied Technology Leoben).

IM POLYMER’s business concept is based on a captive system comprised of three pillars: IM SOLUTION (R&D for know-how transfer), IM COMPOUND (provision of Polymer granules for further processing by third parties) and IM PACKAGING (development, production and marketing of polymer Paper®). Ideally, the client approaches the company about a solution regarding a particular packaging problem (a producer of organic wellness and nutrition drinks seeking to replace the petrochemical aluminum with ecologically sound packaging for their product, for example), which the startup then works on and develops based on the individual needs of the client, followed by the actual production of the packaging by IM POLYMER’s partners.

Team-building

From the beginning, Markus and Stephan were adamant about assembling a capable team made of “young wild ones,” as Markus puts it, and experienced people that would cover all areas needed to successfully run a business. While Markus was put in charge of marketing, Stephan would clearly be the head of R&D. Within half a year of the official founding, a process engineer was brought on board for production and engineering, as well as a banker who would deal with the legal and financial side of things. “We were pretty well set from the get-go,” Markus says.

For the first two years, IM POLYMER’s work was very much research-focused – and award-winning-focused. In 2012, they received the Fast Forward Award, followed by the Young Entrepreneur of the Year Award in the category “environment” in the same year, and the State Award for Innovation (Econovius) in 2013.

Every year, 800 billion plastic bags are produced. […] They just don’t rot. And we end up ingesting them with our food.

“Although winning such awards doesn’t help much on the market, it provided us as a small business with a lot of reputation,” Markus says. With a marketing budget of €6.500 in their first year, the awards were “extremely important for publicity,” he adds.  

8 billion lost plastic bags and half a Green

But no publicity in the world can replace a sound strategy and mission that gives meaning to a startup’s work. For IM POLYMER, it’s sustainability. Their approach comes out of a sense of responsibility for the environment in the context of the challenges posed by today’s consumer society when it comes to waste disposal.

“Every year, 800 billion plastic bags are produced. One in a hundred gets lost – that’s 8 billion plastic bags each year,” Markus says. “They just don’t rot. And we end up ingesting them with our food,” he adds, knowing well that this has been an issue for the past 20 to 30 years. Although Kainer says he is not “on the charitable track,” he does admit having turned into “half a Green.” “Wherever it’s useful and makes sense economically and ecologically, we should replace petrochemical plastics with green plastics,” he says.

Since IM POLYMER’s products are rarely ever cheaper than conventional packaging, the Styrian startup knows it needs to emphasize the value-added component that is visible to consumers.

“Ours is not a mass market, it’s a niche – but with plastics, it’s a pretty big one.”  Areas of application range from food and beverage packaging, folding cartons, power and specialty papers to products outside of the packaging segment, such as vouchers or business cards, cutlery, and toys, especially for young children whose parents don’t want them licking conventional plastic.

• IM POLYMER milestones:
• DECEMBER 2011: won business plan competition
• JUNE 2012: founded IMPOLYMER as part of ZAT (Zentrum für Angewandte Technology Leoben / Centre for Applied Technology Leoben).
• SEPTEMBER 2012: received the Fast Forward Award
• NOVEMBER 2012: named the Young Entrepreneur of the Year Award in the category environment
• MARCH 2013: won the State Award for Innovation (Econovius)

Despite knowing that they have a product that is ‘modern’ and attractive to investors seeking to add an environmental component to their portfolio, IM POLYMER has found it difficult to get funding from the free market to meet their 750.000€ financing needs. Instead, Austrian funding bodies have played an important part in getting IM POLYMER up and running: The Leoben-based startup has secured a venture capital investment from StBFG (Steirische Beteiligungsfinanzierungsgesellschaft), as well as funding from FFG.  

Lessons learnt

For IM POLYMER, bringing investors as strategic partners on board in the future is a viable option, according to Markus. “But an exit is definitely out of the question in the next five years,” he adds. “We’re simply having too much fun with this.”

When Markus says „fun“, he means juggling a lot things at the same time. As a young entrepreneur, “you shouldn’t be too proud to do something,” he says. Sometimes that means meeting with CEOs of major companies and picking up toilet paper for the office on the way home.

Amidst all this, Markus has found it crucial to maintain a clear focus in an effort not to get bogged down. For IM POLYMER, this has meant learning to say no and to realize that not every client order can and should be attributed the same level of importance.  Another take-away for Markus: “A lot of things take longer and cost more than expected.” And: “You need to have thick skin – only very few people make it. You really have to believe in what you do.”

You need to have thick skin – only very few people make it. You really have to believe in what you do.

With self-employment also came a great deal of self-realization and, with it, an acute awareness of Markus’ own strengths and weaknesses. “Either you try to eliminate your weaknesses, which takes a lot of time and energy, or you find someone to compensate for them,” he says.

In the future, IM POLYMER seeks to strengthen marketing and distribution, to build and intensify partnerships in Austria to establish their products in the marketplace with a clear commitment to keeping production in Austria. “Even though it might be a bit more expensive: It’s a quality criterion and clear statement,” says Markus. And as a marketing man, he likes clear statements.

---

---

Dr. Iris and Dr. Andreas Filzwieser met while studying non-ferrous metallurgy at the Montan University in Leoben, a city in Styria, Austria. Out of necessity, they learned quickly how to work hard without much sleep and how to communicate with each other openly and efficiently. These lessons proved to be essential for their future success.

 [reference id=”4558″]

Soon after Iris received her PhD, she realised it would be nearly impossible to find a job giving her enough flexibility to manage her home life with three children. She resolved to start her own company. Andreas quit his company job and together they found Mettop GmbH, a university spin-off, in 2005.

Mettop is short for “metallurgical optimisation”. The company has patented technologies for metal-smelting furnaces – replacing potentially dangerous water-cooled processes with an innovative ionic cooling system – that make them far safer and more efficient. Today, with a staff of 13 scientists and engineers, sales agents on every continent and some 50 industrial clients, they are generating annual revenues of about 2 million euros and are profitable. Still based in Leoben, they continue to develop new solutions for the non-ferrous metal industry and are growing at a steady rate.

AplusB programme integral to startup success

We thought we knew enough, but found out quickly that we knew nothing about being entrepreneus Iris Filzwieser about first steps

Neither Iris nor Andreas had had any previous entrepreneurial experience. “Both Andreas and I gained some business knowledge throughout our studies. We were always completely responsible for the whole project – not just for the research side, but also for the financial and legal matters. We thought we knew enough, but found out quickly that we knew nothing about being entrepreneurs,” she admits.

When the couple learned about the Academia plus Business (AplusB) initiative and its academic spin-off incubator in Leoben, the Centre for Applied Technology (ZAT), they applied and received a combination grant-loan award for 70.000euros. This, combined with their own savings, enabled them to found Mettop about ten years ago.

“We were very excited about being accepted into ZAT,” recalls Iris. “We set up our office there, taking advantage of the infrastructure and administrative services offered.” While the funding enabled them to survive during the first year of research and development, as well as to travel around the world rounding up business, “the biggest advantage of ZAT was its network,” she says. “It was possible to get a variety of people around the same table. We got the valuable business, financial, and legal support we needed, participated in different types of free on-site seminars, and it was possible to get one-on-one counselling.”

A quick start leads to rapid growth

[slideshow ids=”2,3,4,5,6,7″]

Mettop is short for “metallurgical optimisation”. The company has patented technologies for metal-smelting furnaces – replacing potentially dangerous water-cooled processes with an innovative ionic cooling system – that make them far safer and more efficient.

By their second year of operations, they already had enough contracts and customers to finance their business through cash flow and did not have to find additional sources of investment. This has only changed recently when, in April 2015, the CEO of KTM, Stefan Pierer invested 1.25 million euros for a 24.9% stake in Mettop. Iris explains that “Stefan also studied Metallurgy in Leoben, so when we pitched him our technology, he was easily convinced of its potential. He contributes more than just his capital. He brings his big network in other industries and is helping us to find other uses for our cooling technology, such as casting systems for automobile production and the steel industry applications.”

Over the years, Mettop has also hired several students from the university, one of whom became a partner for two years. He is now the General Manager of a spin-off company they started together called Urban Gold, which has a patented new technology for recycling metal from scrap electronics waste.

Partnership, at home and the office

In many companies, especially in the Austrian culture, managers are afraid to show their true feelings about each other, but this isn’t the case with us.

Urban Gold was not the Filzwiesers only new daughter concern. In 2010, their fourth child was born, a girl this time. The Filzwiesers have managed to become a tight working unit both in the office and at home. “When we started the company together, everyone – friends, customers, bankers – told us it was a bad idea and that we would be divorced after a few years of working together,” Iris remembers. “But, in my opinion, the power of our partnership is stronger than with non-married partners.”

For many, it seems inconceivable to merge one’s domestic and professional relations so intimately and not let one damage the other. However, Iris couldn’t imagine doing it differently: “Of course, we had our doubts along the way. It wasn’t always so comfortable but required about two years of hard learning, how to work together and live together without letting discussions get emotional.”

Iris observes that “In many companies, especially in the Austrian culture, managers are afraid to show their true feelings about each other, but this isn’t the case with us. We always take the time to reflect and give each other critical feedback. If he weren’t my husband, I would probably never tell a partner or boss that I thought he did something stupidly or should have done it differently.”

Likewise, being business partners has helped them communicate better about personal matters. Unlike many other married couples, “We’ve always had to discuss every aspect of both our business and private life until we came to a decision or resolution. As business partners, we never say yes if we don’t mean it, and this extends to our personal lives. We’ve learned to be completely open with each other and always agree on a way to work together.”

Putting the pedal to the metal

Sometimes it is necessary to go new ways; Photo credit: Mettop

Ever since she was still working on her PhD, Iris has followed a gruelling schedule starting at 6:00 am and ending 20 hours later. In between, she juggles her domestic and occupational responsibilities. How does she keep up her stamina? “There is no option for burnout. With four kids, you have to be much more relaxed and flexible. My children actually prevent me from getting burned out. They ground me and show me what’s really important. Our kids are proud of their parents and are happy to have more freedom than their peers.”

Because 99% of Mettop’s customers are abroad, Andreas travels frequently, leaving Iris with the lion’s share of housework and management of the headquarters in Leoben.

“One of Andreas’ biggest talents is listening to our customers, learning about their problems, and then converting this knowledge into new project solutions. He can give me a call when he’s traveling and I can manage the technical work here. It only works because we share the technical expertise and both speak the same language. That makes it much easier to communicate, whether it’s about business or private affairs,” Iris says.

With the recent inflow of capital, Iris and Andreasare ambitious to keep growing and diversifying. They have no plans to step back from actively managing the company. “We plan to increase our revenue and double our staffing to become a well-established mid-sized technology company.”

---

---

[reference id=”4415″]

Klaus Matlschweiger, a trained mechanic from Lassing, Austria, started working in the vehicle safety sector in 1999. “I was deeply immersed in the industry,” the 37-old entrepreneur says, looking back on his two decades in the industry, working for the likes of Daimler, BMW, and VW. “My dream has always been to build systems [for vehicle safety solutions] that are easier to use and more precise,” he adds. Fast forward 15 years, his company, which develops systems for car safety tests, was recently acquired by Humanetics, the biggest developer of crash test dummies, becoming a major success story in the vehicle safety testing sector.

Electric beats hydraulic

When Matlschweiger filed his first patent for a technology that employed acoustics instead of physics to measure and assess test crashes in 2005, a colleague of his told him: “We need an English name – this is going to be big.” And it would be, leading FronTone to be the major supplier of test systems for vehicle testing, especially in the fields of Occupant and Pedestrian Protection. But success did not come overnight. Presenting their systems at various car manufacturers, Matlschweiger and his partner soon recognised their limitations. “We stood zero chance. We were just two random guys from Graz –we were doomed to failure,” the entrepreneur remembers.

Photo credit: FronTone

Undeterred by the setbacks,  they continued developing their systems for vehicle safety solutions, conducting experiments and simulating crashes. “We needed to be different from, and better than, what was on the market at the time,” Matlschweiger says. The only way to do that was to develop a frictionless electric E-liner drive system, thus moving away from the hydraulic motor. Simply put, they have developed a system that provides more precise test results than conventional ones, thus making the testing process for all kinds of industrial applications more efficient and accurate.

In 2007, Matlschweiger and his team of two – his wife Sandra, and co-founder Michael Kohlweg – joined the Centre for Applied Technology [Zentrum für angewandte Technologie] (AplusB) in Leoben, a city in upper Styria. There, they received their first funding – 72,000 euros – as well as access to a workshop in Niklasdorf to develop their applications. They mostly focused on testing systems for front and interior testing of vehicle safety. Three year later, in 2010, FronTone was founded as a GmbH and acquired their first client. “It was a long dry spell,” Matlschweiger says.

Sleepless in Styria

At the time, Matlschweiger was working 30-hour weeks at the vocational school as an automobile technology teacher with an additional 10 hours of preparation per week and a part-time job at a lab at the University of Technology in Graz (TU). After getting out of school at 4pm, he would go to his lab job and then drive to Niklasdorf, where they had a workshop, at around 8 or 9pm to work on his prototype until 2 or 3 in the morning. All the money he earned in his two day-time jobs were poured into his startup and into the flying instructor course he took on weekends to have a plan B in case the startup didn’t work out.

It was a brutal time – for my family too. I don’t want to go through this again. 

Klaus Matlschweiger reflecting on the beginnings of FronTone

“I now realise that might not have been healthy,” he says. “It was a brutal time – for my family too. I don’t want to go through this again.” Thinking back to an Easter Sunday five years ago, Matlschweiger remembers sitting at an industrial facility he had helped assemble in Germany, his overall on and thinking to himself, “this is not normal anymore.”

“I was often stretched to the limit but it’s the best thing I ever did – besides my family,” he says. “My wife always supported me. I couldn’t have done it without the help.” Sandra Matlschweiger acts as FronTone’s procurement head – “she looks at the cost side of things, while I tend to follow my gut feeling – it’s a good combination,” he says. This gut feeling also led him to pack up his things and move his family to Munich in 2010 in order to build up the branch there, leaving behind a home that had taken him 7 years to renovate – only to return a year later.

Broadening horizons

• MILESTONES BOX
• 2005: Matlschweiger files his first patent
• 2007: FronTone enters AplusB, receives funding and a workshop
• 2010: FronTone is established as a GmbH in Austria
• 2015: FronTone is acquired by Humanetics, Matlschweiger remains Managing Director

“But that’s my approach to things: one door closes, another opens. If I run into problems, I don’t ponder the ‘why’, but ask how we can make it work,” Matlschweiger says. His ability to tackle things head-on and move on is one of the traits that he believes have allowed him to succeed. Hurrying away from his mother’s deathbed, to take an important business call is part of the 100% dedication to his work. “I don’t have a cold heart, but this is the only way it works,” he says. “My message to other young founders: it’s extremely hard.”

What Matlschweiger appreciates most about his entrepreneurial journey is the personal development he has undergone. “Suddenly leading a team, being responsible for a whole business, going on business trips to Russia, the US and China, and giving specialist lectures has vastly broadened my horizon.”

It is at these lectures that Matlschweiger encountered the often impermeable academic sphere in Austria, characterised by its obsession with degrees. He remembers a time when he was un-invited from a talk because he did not have a university degree. “It was a slap in the face,” Matlschweiger says. Today, he is deeply immersed in these circles, “but it was a long way. In Austria, if the DI [Diplomingenieur] or MSc is missing, things become difficult. I always wanted to shatter that.”

Financing FronTone

Another systemic hurdle Matlschweiger has had to grapple with are finances. “We simply got lucky that we even got some money,” he says. “Banks don’t want to take any risks with young entrepreneurs anymore.” In a sector where the seller is usually expected to put up the money for monthly advance payments of around 400,000 euros per project, liquidity becomes a major problem. “Even with loan guarantees, we weren’t able to secure enough money,” says Matlschweiger. “In the past two years, I ended up spending a third of my time at banks – not a lot of fun.”

Photo credit: FronTone

In the end, financing was one of the main reasons why FronTone reacted positively to an acquisition offer by Humanetics, the market leader for crash test dummies. “The nice thing was that they approached us because they were looking for a suitable engineering company to add to their portfolio,” he says.

“Although we have all these great projects and are doing well as a company, the way the economy works at the moment SMEs don’t really stand much of a chance without a proper financial background,” Matlschweiger says, drawing attention to a problem that numerous startups, especially in the tech or medical sector, are facing these days. With Humanetics as their parent company, FronTone can now look into the future with more ease: “We now report to our parent company, and not the banks, which is definitely more relaxed,” Matlschweiger says.

Other than the improved financial situation – and “more clients, more staff, more work” of course – there aren’t many changes, says Matlschweiger, who will remain managing director of FronTone, adding that there is “a great level of trust” between them and the buyer.

Remaining in the lead

As FronTone has been the market leader in the test equipment sector since 2013, with customers such as Daimler, BMW, Volkswagen, and Jaguar Land Rover, Humanetics would do well to keep them as a subsidiary. What makes them so successful? For Matlschweiger, it’s the mix of having an innovative technology, paired with an extremely service-oriented approach.  It is this approach to customer-friendliness that he teaches his current staff of 25, which is expected to grow to 30 this year. In the future, he wants to consolidate the base location in Feldkirchen and increase the volume of sales – all the while sticking to his mantra that he has pinned up on the wall in his office: “Success has two letters: do.”  

 

This story is brought to you in partnership with AplusB, a programme funded by FFG.

---

---