‘Whatever you do, can be done better’
Andreas Gotwald is the managing director and an expert in the field of subsidy advisory at TPA Horwath. Ever since he left university, he has been working on research and innovation projects. He worked in the United States, where he was responsible for Austrian high-tech startups going to the West coast, and upon returning to Vienna, he started working as a EU Subsidies Consultant. Gotwald will be part of the Twin Entrepreneurs coaching programme, organised by the Vienna Business Agency, and the deadline for which is 19 November. We caught up with him to find out more about his coaching methods.
Tell us a little bit about your background.
Our company is TPA Horwath. We are a consulting company with three divisions: tax, audits, and business consulting. My team and I are specialised in the technology, innovation and subsidies area. That means the projects we are normally working on are innovation, research and development projects in existing medium or big companies and many new startup companies. We support them in the business and financial planning and applications for subsidies, to help them to start their new business on a professional basis.
What would you say are some of the main components of expanding a business internationally?
International expansions often suffer from ‘spontaneous activity’. This means one day new or small, or even medium-sized companies, decide that Austria is too small for them and they want to expand to other markets.
They make their decisions without a proper analysis: Where are my competitors? Who are they? What are they doing and offering? What are the prices my competitors ask for? Are there international regions where I have a realistic chance to export? To be spontaneous on a personal level is very nice; to be spontaneous on a business level is high risk. And I have seen many companies investing time and large amounts of money going into new markets without weighing their chances of being successful.
Speaking of internationalisation, what are several things that you can teach startups in 10 hours of coaching that would otherwise take them months to learn?
The first step is to analyse and, if necessary, improve the business and financial plans of a new company. Many companies have a business plan that is hardly realistic – meaning the planning is vague and the activities are not clear. Financial planning is the most critical area: What does the entrepreneur plan to do when, where, and in which details. These questions decide the financial needs that should be included in the financial planning. I have seen many projects, where young or even medium-sized companies plan to expand or export without a serious planning of their costs or the budget to enter other markets.
The second phase is to get to know the young entrepreneurs. Do they know the success factors in the new market for their new product? Are they prepared for going to Germany, France or the UK? Usually this requires one or two meetings because the planning for internationalisation is much less detailed than the business plan. This is where I expect to spend most time in my coaching because it works on a personal basis. You discuss what is good, what is weak and what probably won’t work. Nobody likes to be criticised, so this takes some time, a personal relationship that needs to build up so that the entrepreneur is willing to accept a different opinion. Many young companies fail because the entrepreneurs are absolutely convinced that only they know everything.
The last step is to talk about the financial needs. As an entrepreneur in Austria you need a certain amount of money to expand to a foreign country. This is all connected to marketing and advertisement. The costs for production or development are significantly lower than the costs for marketing. There needs to be very smart planning: Howdo I market myself? How much is needed to get visible in a new market?
If you are an entrepreneur in Vienna, you can market yourself with a relatively low budget. If you go to bigger markets, you need to set activities that cost much more money and this requires a good plan. Ten hours is relatively limited time, nevertheless we hope that very effective and efficient coaching can help a lot.
How should startups prepare before the coaching so they don’t waste time and get the most out of it?
What we would like to see is that the entrepreneurs come to us with the newest versions of their business and financial plan. We often meet with entrepreneurs and they present us a two-year-old business plan. The plans should include the experience the entrepreneurs have made within the last six to twelve months.
It says that startups can use the coaches as sparring partners. Why is this important?
Spar partnering is a specific form of coaching, which basically involves an intensive discussion. The entrepreneur believes to have good ideas, clear planning and is willing to discuss other options with the coach that should improve his or her planning and thinking. The entrepreneur should realise that he or she is not the only person who knows how his business could be successful. A coach usually has more years of experience, has seen many different young companies and has learned from good and bad results.
The term sparring partner is actually used in boxing: you fight until you get the best solution. It’s important to establish personal trust so both the entrepreneur and the coach need to be very open, accept different opinions and find a way to discuss what can be better and motivate the entrepreneur to accept these new views, work with them and have higher success in their project than with their original idea. Whatever you do, can be done better. It’s only a question of how much better and how long it takes.
Twin Entrepreneurs is a cross-border initiative aimed at providing practical assistance to startups from the area of Vienna and Bratislava that want to make the second step – sustain their business and expand abroad. The series is organised by the Vienna Business Agency, the European National Agency for Development of Small and Medium Enterprises and the Young Entrepreneurs Association of Slovakia.
Interview done by Stefanie Rauchegger.