The Bionic Surface Shark Skin Effect

Cofounders Andreas Flanschger and Peter Leitl; Photo credit: Bionic Surfaces

What might be the title of the latest dystopian blockbuster film, The Bionic Surface Shark Skin Effect is actually a combination of a Styrian engineering company’s name and a technological phenomenon used to  “improve three-dimensional body flow applications,” according to founders Andreas Flanschger (Managing Director) and Peter Leitl (Technical Director).

Huh?

Put in layman’s terms, Bionic Surface uses so-called “riblets” – sharkskin-like surfaces that have micro and nano-structured “tiny grooves arranged longitudinally along the flow, which help decrease drag in air, water, or gas,” explains Peter. While sharks use their special skin to swim fast and efficiently, Bionic Surface’s technical surface “skin” can be applied for various purposes, such as “increasing energy output for power plants, saving fuel in aeronautics and spaceflight and making sure oil can run more efficiently through pipelines,” he adds. To help demonstrate their technology, they also make simulations for these applications.

How it all began

In 2008, Peter Leitl, a recent engineering graduate from the University of Technology in Graz, entered his riblets idea in an ideas competition and it landed among the Top 10. “That’s when I realised: this might be something,” Peter remembers.
“So he started looking for a partner – and found me,” Andreas adds. The two knew each other from university, where Andreas had just graduated with a degree in business engineering. Having worked together at the university’s Racing Team since 2003, they had intimate knowledge of each other’s strengths and weaknesses.

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 “It was more of a ‘let’s try this and see how it works’ kind of thing,” Andreas remembers. “We definitely did not have a master plan at the time.” This, however, was needed when they applied for a slot at the Science Park Graz in 2008. Having formulated a coherent business plan, they were accepted into the centre, incorporated as an Austrian Offene Gesellschaft (open society) at the end of 2008 and received FFG (Austrian Research Agency) funding in April 2009. “This was our first major milestone,” Andreas tells inventures.eu.

Understanding financial realities

Andreas feels it’s important to open young founders’ eyes to the reality of funding by research promotion agencies and other funding bodies: “If you are accepted in to the FFG basis program, for example, there will be a loan you will have to pay back in five years,” he says. “It’s tough to know that with no money to start with you will have to pay back a considerable lump of money pretty soon.” 

“This was the first risk we took as entrepreneurs,” adds Peter.

Red Bull Air Racer Hannes Arch in action; Photo credit: Rayo Volks

Their first big project that would bring them publicity and helped them gain experience was with Hannes Arch, the Styrian Red Bull Air Race champion, whom the two young entrepreneurs approached about improving the surface on his plane to make it fly faster.

With positive results from this project, the they set about building a network and landed their first jobs aerodynamically improving a wide range of applications. “It’s all about recognising opportunities – and seizing them,” Andreas says. “Some would call it luck but it takes something to recognise the opportunities.” It surely helped that Bionic Surface technologies was able to “solve problems that others couldn’t,” as Andreas puts it. So they kept landing jobs and growing.

Management accounting is crucial

Regarding the acquisition of customers, Andreas offers another piece of adviceto other founders: “Although it’s all nice and good to be meeting with the CEO and all the corporate hot shots, at the end of the day, it’s the controller who talks to you about the costs of the whole thing – and this is where you win the contract, this is where the real battles are fought,” Andreas says. “You need to arrive at a win-win-situation for both sides.”
This is where Andreas’ business background comes in handy. Having graduated with a degree in business engineering and with a PhD in business (which he earned while working), he has a clear understanding of the importance of controlling. “Knowledge of everything that really sucks to study at university – such as accounting, financial management and management accounting – has actually helped us a lot.”

Knowledge of everything that really sucks at university – such as accounting, financial management and management accounting – has actually helped us a lot.

Writing his dissertation on controlling in startups, he remembers being truly shocked about how some young entrepreneurs went about managing their finances: “My hair stood on end when I heard some of their statements.” He says that, back then, he could already see which startups would make it and which ones wouldn’t.

With Andreas responsible for the business side of things as the managing director and Peter as the technical director, their areas of responsibility are strictly delineated and this works well for them. When it comes to strategy, for example, Andreas is usually the one who works out the plans and then talks it over with Peter, who gives his input. “We are each other’s greatest critics,” Andreas says. “We are good at objectively presenting our opinions without becoming all emotional.” Peter adds, “If one of us is against something, he will say so and the other person knows it’s not meant as a personal insult. We balance each other out, and this keeps us from making hasty decisions while keeping up the pressure on each other at the same time.”

Organic growth

Due to the growing success of the business, Andreas and Peter opted to hire their first employee in 2010. The staff has now grown to a ten-person team, of which three are part-time students. Hiring university students instead of experienced engineers and training them on the job is a deliberate strategy employed by the entrepreneurs. “The students usually write their master’s theses in cooperation with our company and then stay on after they graduate,” Andreas explains.

Although business has been good and the company is steadily growing – Peter and Andreas are looking to hire only two more people this year – they don’t want to have more than 20 people. “That would take the fun out of it,” Andreas says. “Our ultimate goal is to continue to be successful at what we do – growing can be part of that but doesn’t have to be.” If there is to be growth, it has to be organic. “We want to grow by our own means – without loans,” Andreas emphasises.