The problem with German startups is that they’re too focused on Germany, believes Konstantin Guericke. “Israeli companies don’t build products for the Middle East,” he told me during an interview this week. But German startups often view Germany as their home market, which robs them of the chance to reach customers in the U.S. and elsewhere around the world. Guericke wants to change that, which is why he just joined Berlin-based Earlybird Venture Capital as a Silicon Valley-based partner after serving as a Venture Partner for two years.
The German-born entrepreneur who co-founded Linkedin back in 2002 specifically wants to help Earlybird pick German startups that would be able to compete in the U.S., and then help them do so as a board member.
German startups long had a bad reputation for copying successful U.S. businesses like Ebay and Etsy, but Guericke calls it “a necessary stage for an ecosystem.” Part of the problem was that U.S. companies waited too long to bring their products to markets like Germany, part of it had to do with a risk-averse mentality of German VCs who would only want to invest in companies with “proven” products and business models.
The silver lining, Guericke said, that this first wave of German copycat startups generated enough wealth to enable a new generation of entrepreneurs to take risks. Initially, German angel investors were “doctors and lawyers,” said Guericke, and startups were led by MBAs looking to monetize quickly. Now, developers are founding startups, and angel investments are coming from people who are entrepreneurs themselves.
But while Germany’s startup capital Berlin has seen a few internationally successful startups like Soundcloud and 6Wunderkinder in recent years, it is still missing huge exits. When Ebay bought Skype for $2.6 billion, it led to a wave of Estonian software developers who founded their own companies, Guericke said.
Germany hasn’t had a deal like that, and SAP, the only huge software success story coming out of the country, is now more than 40 years old. Guericke told me that he’d love to help a German startup to a Skype-like success. “I look at it as a mission for myself,” he said.