David Knight is the editor of Silicon Allee, an English-language website bringing you the latest tech and startup news from Berlin and Germa David Knight is the editor of Silicon Allee, an English-language website bringing you the latest tech and startup news from Berlin and Germany.
Like many top VC firms, Mangrove Capital has been increasing its focus on Berlin this past year. Last month, they put on a big party here in a venue consisting of old shipping containers – what could be more Berlin than that – as they continue their search for the next big thing.
One of the biggest names behind Luxembourg-based Mangrove is Michael Jackson. The famously-monikered investor, who now lives in Denmark, was previously the COO at Skype, and has a wealth of experience in founding and building companies.
Silicon Allee (a TNW content partner) caught up with him to pick his brain on what 2013 might hold for us.
SILICON ALLEE (SA): How do you see the startup scene in Berlin at the moment?
MICHAEL JACKSON (MJ): I’ve been watching Berlin for a long time. We’re a European VC company and we study the market across Europe. I think it is a very exciting market and there is a lot of activity here. We have to look through the froth – there are quite a lot of frothy companies here – into where the substance is.
I’m a great believer in finding companies that have a worldwide ambition, a genuine ambition to do something meaningful, rather than to do something simply because you can. If I had an observation of the lifestyle side of things, there are parties for this that and the other, but you don’t build code when you’re at a party.
You might be having a nice time but there is a difference between drinking beer and working. If you go out somewhere, you are using valuable time that you could be spending on growing the business and hopefully that’s what you are really focused on.
SA: How important is time to founders?
MJ: As an individual, you are entering a period of life as a startup founder when you are going to spend two or three years working extremely hard if you are going to make it worthwhile. So you have to assess during that period basically every minute of the day, 24 hours a day, as to whether this is getting me closer to my goal.
You have to ask, why am I going to this event? If I am going because everybody else is going, and I know them already, then maybe it’s better to be doing something else. In essence one is always selling the business as a startup founder. And you are either selling to customers or investors or to staff, future and current employees.
So there is that aspect – when you go to an event, are you recruiting? You have to be objective when you come away from it and say, what did I get out of this? It sounds a bit clinical to do that because you go to a social event and it is kind of nice.
But time is precious.
(Michael Jackson on stage at the Mangrove party describing the pain founders can sometimes feel)
SA: Is being clinical the best way for startups to approach their whole business?
MJ: Yes. You’re going to probably spend a year or two trying to build something where every single hour can be quantified against product development or getting users or doing press interviews or whatever it is; things which hopefully produce concrete results for the product.
I’ve started several businesses myself and all have been extremely intensive. You wake up in the morning, you rush to work and you’re there until its bedtime, and bedtime is late. You wake up in the morning and you’re back on the same treadmill again. It’s because it’s your life.
SA: What about life work balance?
MJ: Everybody talks about this life work balance story but I’m not a believer in life work balance being eight hours here, eight hours there.
It’s about being happy in yourself; when I’m living I’m working and when I”m working I’m living and it’s what I want to be doing, because I’m with people I like and it’s fun, it’s not stress. Stress is a danger, but stress is caused by frustration. If you’re in charge of your own future, your own destiny, then it’s just hard work.
Hard work never killed anybody.
SA: Is there not a problem of burnout for founders working too much?
MJ: Working too many hours isn’t the problem if you’re enjoying what you’re doing. A lot of the [people reading this will] have done coding, and you sit around and get caught in a coding problem and you can be there till two or three in the morning doing it. And it’s not stressful per se, but it is hard work.
It’s just something that you enjoy. It’s almost meditating, having a problem and solving it, and it brings you satisfaction. Then you go to bed at three in the morning and you wake up at eight and you think, wow, that was cool, then you start again.
SA: How does Berlin compare to other European startup hubs?
MJ: It has a phenomenal attraction to younger people just because of the nature of the city. It’s a young person’s city and a relatively cheap city to live in. It’s a Bohemian city.
What it doesn’t have is the older people, the corporate people, the guys with more maturity and experience in sales and business development. In German you’re going to find them in other cities, and the question is can you build a mid-term management team here, who are experienced in managing a business with some sort of turnover, some tens or hundreds of millions of turnover? Do these people exist in this city? And it’s not obvious.
The corporate sector here is essentially pretty weak. The big R&D establishments from industrial companies, as far as I have seen at least, don’t appear to be represented here. Guys like Deutsche Telekom are coming here and opening incubators and stuff, but that’s probably because they don’t have any presence here. Theoretically their head office is here but I think that’s a theory for most German companies rather than a practice.
And that’s an issue for young guys, very keen and straight out of school; if you’re going to be building businesses you need some older people who can provide some experience, particularly when you get into sales and partner management. And they’re not here.
SA: Is founding a startup becoming too much of a fashionable thing to do?
MJ: I see that a lot. It is partially fueled by government, who want to say, oh we started 20,000 companies or whatever, even if they were 20,000 one-man companies that aren’t really going anywhere. Having 20,000 people trying to do something on their own, that almost seems like an extension of the school system.
I have a belief that companies need talent and the value creation is probably within larger companies, a company like SAP, which has tens of thousands of engineers, software designers and so on in Germany and if they had spread themselves across 10,000 startups maybe it would never have existed.
That’s speculation, but what we don’t see in Berlin or many other places is these more substantive companies coming out of this frothy startup environment
SA: What trends do you see in new business and technology?
MJ: It goes without saying now that the mobile industry has completely transformed the way we interact with the Internet. Until recently, we had mobile as an extension of desktop Internet, a mini version of a website. But is a mobile project now something completely different? I think it probably is.
There are great sectors here that we haven’t got close to. This kinds of stuff is going to transform the way businesses work, I think. I don’t think we’ve even seen the beginning of that – when we went to the Internet right at the start it was one thing, and it’s developed into something else. I think we are going to see the same with mobile.
If I could sit here and say what the answer was, I wouldn’t sitting here!
This interview originally appeared on Silicon Allee.
Top image credit: Fabian Matzerath for AFP / Getty Images
Get the TNW newsletter
Get the most important tech news in your inbox each week.